STOCK ALERT - China power firms surge in Hong Kong on tariff hike approval hopes2008-4-24 11:18:00 a.m. HKT, XFNA
China power producers were sharply higher on speculation that Beijing will eventually allow a tariff hike as most firms are struggling with cost pressures stemming from rising coal prices. At 10:46 am, Huaneng Power was up 0.45 hkd or 7.91 pct at 6.14, Datang Power was up 0.32 hkd or 6.3 pct at 5.4, Huadian Power was up 0.18 hkd or 7.76 pct at 2.5 and China Resources Power was up 1.56 pct at 9.27 pct at 18.38. Analysts said reasons for a tariff hike in China are compelling as electricity producers are facing a squeeze in profit margins as coal prices and other operating costs continue to rise. "Speculation on a stamp duty cut (on stock market transactions) in China has been circulating for weeks and it did come true. Rumors about a tariff hike might come true as well," said Francis Lun, general manager at Fulbright Securities. China yesterday announced a cut in stamp duty on stock market transactions to 0.1 pct from 0.3 pct, meeting market expectations. Electricity firms have been lobbying the government to make adjustments to retail guided prices of electric power, but their pleas have been ignored so far due to high inflation.
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