Shanghai market steady at noon break

SHANGHAI'S key stock index was almost unchanged in the early session today. China Railway Group Ltd gained after it was reported that it won a contract to construct part of a huge high-speed railway between Shanghai and Beijing.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, edged up 0.1 percent, or 5.51 points, to 5,367.08 at 11:30am today. The index opened at 5,357.45 points, 4.12 points lower than its Friday close of 5,361.57.

Winners in the Shanghai market outnumbered losers 494 to 274 and 79 were unchanged.

The Shenzhen Composite Index, which covers the smaller mainland stock market, was up 0.8 percent, or 12.11 points, to 1,520.75.

China Railway was the biggest winner after the government handed out 83.7-billion yuan (US$11.5 billion) in contracts for the Shanghai-Beijing high-speed railway. It received 40 percent or 22 billion yuan of the project. The world's third-largest construction company rose 6.30 percent, or 0.72 yuan, to 12.15 yuan..

Coal makers also enjoyed a good morning as coal prices gained as much as 4.1 percent in November from the previous month, the National Development and Reform Commission, China's top economic planning body, said in a statement posted on its Website.

Datong Coal Industry Co jumped 3.92 percent, or 1.31 yuan, to 34.70 yuan while China Shenhua Energy Co, the nation's largest coal producer, added 0.38 percent, or 0.25 yuan, to 66.01 yuan.

Parent Shenhua Group Corp increased its profit by 16 percent last year to 29 billion yuan as rising energy demand in the world's fastest growing major economy drove sales of the fuel to a record.

The price of thermal coal climbed as much as 20 yuan to between 500 yuan and 510 yuan a metric ton at the end of November at Qinhuangdao, China's largest coal port, the statement said. Average coal prices and transport costs both gained as demand increased, it added.

But oil producers, heavyweights in the market, lost ground this morning.

PetroChina, the nation's biggest oil producer, shed 0.86 percent, or 0.27 yuan, to 31.04 yuan while China National Offshore Oil Service Corp, a unit of the nation's third-largest oil company, declined 0.85 percent, or 0.31 yuan, to finish the session at 36.05 yuan.

CNOOC plans to buy small refineries and build storage depots in Shandong Province to expand into oil processing. The company has signed a memorandum of understanding with the provincial government.

Meanwhile, airlines were mixed in the morning.

Air China, the world's biggest airline by market value, lost 0.34 percent, or 0.10 yuan, to 29.09 yuan and China Eastern, the nation's third-largest carrier, jumped 0.78 percent, or 0.16 yuan, to 20.79 yuan.

China National Aviation Holding Co, the parent of Air China, yesterday said it will offer at least HK$5 a share for a stake in China Eastern if shareholders vote against the Singapore Airlines deal tomorrow. Singapore Airlines and parent Temasek Holdings Pte agreed to buy a 24 percent stake in Shanghai-based China Eastern for HK$3.80 per share last year.