BHP Takeover Bid in Focus, Asia Closes Mixed

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello to our viewers all over China.

You're watching “Asia Market Daily”, co-produced by CCTV Business Channel and CNBC, first in business worldwide.

I am Saijal Patel.

Mergers and acquisitions was the key theme in the markets today. Across Asia, most bourses were mixed, while in Australia, BHP's takeover plan for Canadian fertilizer company Potash weighed on the overall index.

Sources say the global miner may go further on the offensive with its $38.6 billion bid after being spurned.

BHP is reportedly considering bypassing the Potash board and submitting the offer to the Canadian group's shareholders.

Meanwhile, credit rating agency Moody's has said that BHP faces a possible credit downgrade if it clinches the Potash deal.

Short-covering by investors giving the Nikkei a slight lift after 2 days of losses.

Shares of manufacturer Nidec also jumped 5 percent.

It announced it's buying the motors business of US firm Emerson Electric as part of its overseas expansion plan.

In Seoul, Korea Exchange Bank was one of the biggest gainers today.

News that the Australia and New Zealand Banking Group will start due diligence, gave hope that KEB may secure in a majority stake sale.

Financials also in the limelight in Shanghai.

The index got an early boost from a stronger than expected showing from Everbright bank's IPO but finished lower on profit taking.

Everbright shares had gained as much as 17 percent during the day, beating a 5 to 10 percent rise forecasted.

The mid-size lender made its 3 billion dollar debut at 3-10 yuan per share.

Some analysts say the strength could be due to the reasonable pricing, plus an interim lock-up period for up to 75 percent of shares.

(SOT) Daniel Jim, Managing Director, Tripod Management Limited:

This particular issue, it's really more to do with the fact that the actual free fall is very limited, at least for the first 3 months or so. so in terms of intervention, I think it's just probably because of actual supply and demand situation, unfortunately that's not going to be a fair reflection of what the market really want to price this, so I think the real test will become three months onwards.”

Going forward, Everbright has an option to expand its offering to 7 billion shares from its current 6.1 billion share issue.

Investors have been keeping tabs on this debut to gauge sentiment towards banking stocks.

(SOT) Karma Wilson, Head of Asian Equities, AMP Capital Investors:

“I think what people are so focused on now is these banks are all capitalizing after the landing last year, but they have credit curtailed as well and just what's going to happen with the non-performing loans that's going to come through from that landing of last year, whether this capital is needed from that. if it's not needed, whether it's carrying too much capital at the moment, and that will slow their ability to produce earnings. so people are a little cautious on the sector at the moment. you do see that reflected in valuations.”

Moving onto the latest corporate action in Hong Kong.

Superman Li Ka-shing making headlines again with a few new ventures.

Our reporter Emily Chan has more on that story.


Hi Saijal

HK's richest man, Li Ka-shing has emerged as one of the suitors for Britain's high speed rail, High Speed 1. Cheung Kong Infrastructure is bidding for a 30-year concession to run the railway linking London and the Channel Tunnel, in a deal that could fetch about $2.3 billion.

The deadline for the bids closed on Tuesday. And CKI was among at least 3 other rival groups.

Among them, a bidding group that included Goldman Sachs and Eurotunnel. A team allied with Morgan Stanley, and a pair of big Canadian pension funds.

The deal for CKI comes just weeks after it and sister company HK Electric agreed to by Britain's biggest electricity distribution network from French power giant EDF for $9 billion.

And it doesn't stop there for Li Ka-shing.

The HK government held its 5th land auction for this fiscal year yesterday. And Li snapped up 2 plots of land.

Via his flagship property company, Cheung Kong Holdings, the territory's second-biggest developer forked out a combined $976 million for both sites on offer, in an actively contested auction.

The better than expected results comes after the government announced more measures to cool the property market at the weekend.

But yesterday's land sales clearly show that the big developers expect property prices in the territory to continue to rise. Property prices have risen 13 percent so far this year, and follows a 30 percent jump in 2009.

A combination of low interest rates, ample liquidity and sound economic growth are behind the rise.

Analysts believe the government has been unable to manage or even stem the increases in property prices.

The administration has released more land supply into the market with another land auction is slated in about 2 weeks time.

Followed by another in September.

Saijal, back to you.


Thanks Emily.

Well, that wraps up today's business highlights.

I'm Saijal Patel from CNBC.

Have a good evening.

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