Rare hopes for a Buffett bonanza

http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=103853&sid=29941739&con_type=1

Beth Ye and Tony Liaw Friday, October 15, 2010

Rumors that US billionaire Warren Buffett will take part in a share placement by China Rare Earth (0769) has raised hopes the firm may be the next to get the "Midas touch" after PetroChina (0857) and BYD (1211).

The rare earth and refractory products maker is selling 100 million new shares to raise HK$395 million, Reuters reported.
At HK$3.95 each, the offer is a 10 percent discount to the stock's last closing price of HK$4.39 on Wednesday.
An over-allotment issue of 20 million shares could boost the total amount HK$474 million. Analysts estimate CRE's share price to soar after it resumes trading because of the "Buffett effect."

"CRE's share price will rise in the short term if the rumors is true," said Kingston Lin King-ham at OSK Securities. "But it may not be as much as 30 percent or 50 percent as the stock has already risen a lot."

Lin does not recommend CRE as a long- term investment because it does not have its own rare earth mines.
CRE shares almost doubled from a month ago before being suspended from trading yesterday. PetroChina shares jumped over seven times between 2002 and 2007, and BYD's shares rose nearly seven times in the last two years after Buffett bought stakes.

Meanwhile, CASH Financial Services Group (0510) plans to raise HK$73.9 million by issuing 70 million shares through a top- up placement with its parent company Celestial Asia Securities Holdings (1049).
These shares will be placed at HK$1.07 per share - a discount of 9.32 percent to its previous closing price of HK$1.18. CFSG resumes trading today.

Value Partners (0806) will raise up to HK$1.2 billion by issuing 140 billion shares through a top-up placement. The asset management firm is offering the shares at between HK$5.68 and HK$5.93 apiece, a discount of 5 to 9 percent discount to yesterday's close of HK$6.24.