Royal Dutch Shell

Lai See

PUBLISHED : Saturday, 11 June, 2011, 12:00am
UPDATED : Saturday, 11 June, 2011, 12:00am

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Charles Li tempts fate with his 'not-us' comments

You have to wonder if stock exchange chairman Charles Li Xiaojia has not being paying attention recently or has been smoking something exotic, if his comments on the accounting scandals of US-listed Chinese companies are anything to go by. These companies 'would never be allowed to list in Hong Kong', he told reporters from Dow Jones and The Wall Street Journal in an interview. 'You can sell garbage as long as you tell people it's garbage,' he said, remarking on the disclosure-based regimes of many exchanges outside Asia.

But Li is not really speaking from a position of strength. Despite his implication that listing standards are stronger in Hong Kong than the US, smells of varying intensity have lingered over a number of mainland companies listed in Hong Kong.

The list of shame includes: China Forestry, Moulin, Gome, Chaoda Modern Agriculture, China Public Procurement, Citic Pacific, China Zhongwang Holdings and Asia Aluminium, to name a few.

Modestly conceding, 'there are bad apples everywhere', including Hong Kong, Li added, 'I don't think we have had our Enron yet. [We] have not had our WorldCom.' True, the Akai scandal was no Enron, but surely Li is tempting fate.

Slipping Rusal puzzles the market

We see that Russian aluminium company Rusal slipped below its HK$10.80 initial public offering price earlier this week in circumstances that have left the market wondering what is going on. Having reached a peak of HK$14.10 in April, the stock declined to HK$11.70 by the beginning of the month. On Friday it closed at HK$10.70, a fall of 9 per cent. There has been speculation that one of Rusal's anchor investors needed cash in a hurry. These investors all had an opportunity to lower their costs last year when the stock price slipped to about US$7.00.

Another possible seller, according to the 'Dancing with Bears' website, could the Libyan Investment Authority and the Gaddafi family, which reportedly had a stake of 217 million shares for which they paid US$302 million. There is speculation that Rusal's majority shareholder and chief executive, Oleg Deripaska, might be in need of cash. Dancing with Bears quotes RenCap analyst Andrew Jones, who says 'the perceived overhang is likely to cap short-term upside until a cyclical upswing ... in 3Q11 can reverse momentum'.

Nice to see they take an interest

It's always nice to see European oil companies taking an interest in the environment. First it was BP, which apparently used to stand for 'Beyond Petroleum' - until last April, when it was changed to 'Biggest Polluter' after the Gulf of Mexico disaster. Now Peter Voser, chief executive of Royal Dutch Shell, says global demand may outstrip supply by 40 per cent in 20 years, according to Bloomberg. But he's not talking about peak oil - rather, it's water. Voser says there's a link between the two liquids: some Middle Eastern nations use 65 per cent of the oil they consume to run desalination plants producing fresh water. But this process is making the Persian Gulf saltier. 'Nasa has pointed out [that] ocean salinity could have disturbing effects on ocean circulation and climate change over time,' Voser said.

Barbie in bad company again?

Things just go from bad to worse for Barbie, or rather Mattel, which makes the big-haired doll. First, the band Aqua put the boot in with the Barbie Girl song, which incensed Mattel no end. Now AFP reports that Greenpeace is accusing Barbie, or rather the toy-making giant, of contributing to the wanton destruction of carbon-rich Indonesian forests and the habitats of endangered species like the Sumatran tiger. Greenpeace says packaging used in Barbie and Ken boxes contains timber products from Asia Pulp and Paper (APP), which it described as a 'notorious' destroyer of Indonesia's dwindling natural forests: 'Mattel, which makes Barbie, must stop wrapping the world's most famous toy in rainforest destruction.' APP was quoted as saying that it was 'shocked' by the allegations, and denied that its activities threatened endangered species or forests.

A peak(s) real estate experience

Forget The Peak. Lai See can point you to a far more exclusive investment. AFP reports that two 2,000-metre mountain peaks in the eastern Tyrol - Grosse Kinigat and Rosskopf - are up for sale for just Euro121,000 (HK$1.37 million) for the pair. Austria's federal real estate company, BIG, boasts that the peaks offer the 'most stunning views of the Carnic Alps and are popular destinations for mountain climbers and hikers'. Interested buyers have until July 8 to place their bids, and the regional daily Kleine Zeitung says 20 people have already done so.