Riots won't hurt investment in Xinjiang
Updated: 2009-07-08 07:17
By Lillian Liu(HK Edition)
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HONG KONG: The riots in Xinjiang will not dent investors' confidence in the hinterland and minority-dense areas on the mainland, investment consultants say.
"The incident is only temporary and will soon fade away from people's memory," said Patrick Shum, an executive director at Karl Thomson Investment Consultant. The stock performance of two Hong Kong-listed Xinjiang companies was unscathed yesterday.
Xinjiang Xinxin Mining Industry slumped 1.64 percent or HK$0.07 to close at HK$4.19 yesterday, while shares in Xinjiang Tianye Water Saving Irrigations rose 3.85 percent or HK$0.03 to finish at HK$0.81.
"People wouldn't relate the riot to the region's long-term investment prospect. The region enjoys good (geographical) advantages," Shum told China Daily. The country's northwestern autonomous region is believed to attract a growing number of heavyweight energy and natural resource-related companies.
Hong Kong-listed Shenhua Energy, the country's largest coal mining group by output, said this week it plans to invest 36 billion yuan over the next five years to expand coal production capacity in the region.
The project is expected to help increase the group's coal production capacity to over 60 million tons in the Uygur region by 2014, according to Shenhua president Zhang Yuzhuo.
Shenhua's coal output capacity in Xinjiang was 16.8 million tons last year, up from 10.47 million tons in 2005. The money will also be used to facilitate coal conversion projects such as coal-to-oil projects, Zhang said.
China National Resources Development Limited, a state-run natural mineral resources developer, which is also listed in Hong Kong, signed earlier this month a strategic cooperation agreement with Xinjiang Non-Ferrous Metals Industry (Holdings) Company.
Under the agreement, both parties will establish a strategic alliance so that they can utilize their respective potential to the fullest extent in exploration and development of non-ferrous metals and precious metals in Xinjiang.
Xinjiang, which accounts for one-sixth of China's territory, contains one of the country's largest natural gas reserves and has abundant natural resources. It is also the biggest producer of cotton and tomatoes in the country.
Xinjiang Xinxin, the second largest integrated producer of nickel cathode on the mainland, listed on the Hong Kong stock exchange in 2007 in an initial public offering arranged by BOC International.
Xinjiang Tianye Water Saving Irrigations, a water saving system maker, first listed in Hong Kong's Growth Enterprise Market in early 2006 and transferred to the Main Board in January last year.
(HK Edition 07/08/2009 page4)