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2009-1-7 11:57:00 a.m. HKT, XFNA
DJ MARKET TALK: Shandong Molong +7.3% But Upside Likely Limited
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| 1147 [Dow Jones] Shandong Molong Petroleum Machinery (0568.HK) +7.3% at 59 HK cents, adding to 29.4% jump yesterday on announcement it successfully bid for right to sell oil well pipes, casings to PetroChina (0857.HK) with weight value of 88,666 tons, around 25% of company's production capacity in 2009. Still, further upside from here likely limited, as 2-day, 36.5% rally appears to have factored in positives; also, PetroChina likely has strong bargaining power on price, may affect deal's margins. Kim Eng says sales to strong domestic buyer "do not appear very attractive;" add, management's constant A-share proposals, questionable acquisition record are concerns. Volume tapers off to HK$14.8 million vs very strong HK$50.7 million yesterday; intraday peak of 60 HK cents may not revisited.(RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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