This is an another money maker -trading in high volumes -not yet started the race -But once moving ahead there is no chance of picking up this tiddler.Join together to enjoy the instant wealth

Could it have something to do with the Chinese government's statement abour slowing down future growth?

The China 'problem' is way overstated IMO.....Chinese officials are starting to say so too...especially for infrastructure projects such as FTO are involved in...


China acts to calm investor fears
By James Kynge in Beijing and Richard McGregor in Shanghai
Published: April 29 2004 20:31 | Last Updated: April 29 2004 20:31


Stock and commodity prices tumbled on Thursday as investors worried over confused reports that China was slamming the credit brakes on its economic boom. But after Asian markets closed, Beijing explained it had much milder intentions.


The China Banking Regulatory Commission (CBRC), the banking regulator, announced it had requested only that commercial banks should not rush to approve loans before the May holiday if those loans had been scheduled for next month. China holds a week-long holiday from Saturday.

Such rushing of loan approvals was undesirable because it could skew monthly loan growth figures at a time when policymakers are trying to ascertain how effective recent steps to tighten monetary policy have been.

The regulator also urged banks to favour lending for public infrastructure such as coal, power, oil, transport and water supply projects, to ease some of the bottlenecks restraining the Chinese economy and adding upward pressure to prices.

Lastly, the CBRC stressed that banks should be careful to provision for bad loans properly and improve performance standards at branches. But if loans were granted this week, banks should honour the commitments, it said.

The explanation from the regulator struck a milder tone than media reports that Beijing had issued a moratorium on new lending until May 1. Those reports were also inconsistent with the testimony of several banks, which said lending was continuing as normal or had only been partly curbed.

An executive at the Industrial and Commercial Bank of China, the country's largest state bank, said the bank's credit activities were the same as ever. China Merchant Bank, a commercial bank, had curbed loans to enterprises but not to individuals, an executive said.

An Agricultural Bank executive said checks on mortgage borrowers had become more stringent but otherwise there was no effect. But in the Shanghai branch of the Bank of Communications, all lending had stopped until May 1.

The mixed picture was consistent with Beijing's policy of resisting the use of blunt instruments to curb over-investment in some parts of the Chinese economy.

Wen Jiabao, prime minister, has often stressed that China will not use "one knife cuts all" measures to engineer a slowdown.

However, investors in the stock, commodity and currency markets were unsettled by rumours that China was killing off credit expansion as a precursor to raising interest rates for the first time since 1995.

The Hang Seng Index fell 1.31 per cent, or 159.73 points, to 12,005.58 points, its lowest close since November 25 last year. The China Enterprise Index, which groups Chinese firms, fell 4.54 per cent to 4,069.79 points.

The Australian dollar touched a five-month low as commodities and commodity-based currencies were sold off on fears of an abrupt Chinese slowdown.

Some senior Chinese officials have started to mention the possibility of raising interest rates, but most commentators say this is unlikely until the People's Bank of China (PBoC), the central bank, has had a chance to observe how its latest measures to rein in credit growth have worked.

This month the PBoC raised the ratio of deposits that commercial banks must keep on deposit with the central bank, draining liquidity out of the market.

Wang Mengkui, director of the development research centre of the State Council - the Chinese cabinet - told the Financial Times last week that China's economy would slow this year to 8.5 per cent, following a 9.1 per cent official growth rate last year.

I work in the Aviation business, and we have extensive dealing with China (inc china Airlines), I know that they can really play cat and mouse...to the point of insanity, if the stakes are high enough . also the Chinese Govt. departments can best be described as 'opaque' in their dealings with outsiders. I am not surprised at last-minute volte-face's and delays - Keep your powoder dry......

This FT article is what spooked investors in FTO today.....looks like many panicked and sold.....buyers coming back in now at bargain price !!

Fortune Oil's Chinese asset sale delayed
By Friederike Tiesenhausen Cave
Published: April 29 2004 16:40 | Last Updated: April 29 2004 16:40


Fortune Oil, the energy group focused on China, has suffered a setback with the planned sale of its largest asset because of delays in receiving approval from the Chinese regulator.


John Pexton, who became deputy chief executive in February, said: "We obviously hope [the transaction] will happen in the near future. Though the problem with any state bureaucracy is that you just don't know."

Fortune agreed in February to sell its 24.5 per cent stake in Bluesky, a jet fuel company, to China Aviation Oil (CAO) for a mix of cash and shares. But completion of the deal has been hampered by China's state-owned Assets Supervision and Administration Commission, which has so far not cleared the issue of CAO shares to Fortune.

Due to a strong rise in CAO's share price, the Bluesky deal would now be worth about 43.5m compared with 31.8m in February. completing the disposal will be critical for the company's 2004 profits, as the value of deal currently stands at about a third of Fortune's market capitalisation.

Fortune, which is staking its future on China's surging demand for energy, yesterday said it wanted to invest further in downstream natural gas projects. In November, it took an 80 per cent stake in a joint venture with a subsidiary of China National Petroleum Corporation (CNPC), the state holding company that controls most of the domestic natural gas supplies.

China last year overtook Japan as the world's second largest importer and consumer of crude oil after the USA. To reduce pollution from coal and other fuels, the country's government aims to increase the share of natural gas in primary energy consumption from the current three to six to eight per cent by 2010.

Thursday's news came as Fortune reported full-year results, which were delayed by a day because of the uncertainty involving Bluesky. The company said full-year profits for 2003 were 1.3m compared with 1.1m in 2002, leading to earnings per share of 0.09p (0.08p). Turnover increased by 22 per cent to 99m (80.9m). No dividend was proposed. Fortune shares closed up 1/8 p at 7p.

FT Comment:

As one of the few foreign companies that have direct exposure to China's insatiable energy appetite, Fortune could live up to its name if it manages to carve out a slice of the growing natural gas market.

But Thursday's news served as a timely reminder nothing goes without co-operation of the state authorities. Even though the Bluesky deal has become a lot more attractive due to the rise in CAO's share price recently, investors new to Fortune might want to stay put until the regulator has approved it.

i couldn't resist - another 50000 at 6.35. whatever happens to the sale, at this price it will seem like a bargain in six months.

highinterest

I followed you. Could not help myself but buy more even more @ 6.25. Its a worth while for the future. This is a nice stock.

Goodluck all.

good luck goss - that's 120k for me at av 6.6

i followed you guys. Bought in 70000 at 6.5p

what about Share's opinion that these shares are expensive now, since they have trebled over last couple of months ?
Any target prices on this one?

i htink stil cheap

Yes I agree in view of its exposure in China and it has improved its profit and EPS.

I am expecting a doubling to approx 15-16p within next 6 months

Are we hopeful that the Chinese authorities are going to allow the sale? IMO it's always expected that things never run smoothly, but you get there in the end c.f. buying a new house - when all looks to be collapsing, the deal goes through.

If the Chinese do block the sale, what is the worst that can happen?

I believe the sale is safe and only needs the `decent meal and tickets for Euro 2004` to seal it`s approval!!I will quickly add that this is my "tongue in cheek" opinion and shouldn`t be taken seriously, especially by any litigation experts out there!!

China cannot import enough oil at the moment, needs more and more and more. This is a great time to stock up on FTO - its should be heading north fast - use this period of false worry about the deal to build up a bigger holding, IMO.

Why the huge drop today ????

uncertainty , i think , blaney. the delay on the blue sky sale makes a big difference to the numbers. some people dont want to take the gamble and hold. personally i dont see any reason to sell at the moment. at least wait until news is out.

this week is definitely a good opportunity to top up, especially if it drops again tomorrow.

annoncement this morning.


re Bluesky Sales Contract

The Board of Fortune Oil Plc ('the Company') announces that its wholly-owned
subsidiary, Fortune Oil PRC Holdings Limited ('Fortune Oil PRC'), has agreed
with China Aviation Oil (Singapore) Corporation Limited ('CAO') to extend the
date for fulfilment of the outstanding conditions in regard to the sale of its
interest in South China Bluesky Aviation Oil Co., Limited ('Bluesky'), to 30
July 2004. Completion of the sale of Bluesky will take place 7 business days
after the outstanding conditions have been fulfilled. Fortune Oil PRC will
remain entitled to the same benefits as if the transaction had completed prior
to 7 May 2004.

A further announcement will follow in due course.

looks like we will have to hold until july but its still reassuring that things are progressing positively