China Life And Chalco Boost China Indexes

It was a welcome surprise from Shanghai on Monday. The Shanghai composite index, which excludes most foreign investment, closed up 0.8% for a new record high of 5,150.12. That continued the string of record closes that started last week.

Hong Kong's Hang Seng index climbed 2.9% and also hit a new record close of 23,577.73.

On the U.S. front, China Life Insurance (NYSE: - ) and Aluminum Corporation of China (NYSE: - ) led three major China ETFs to new highs in heavy trade. SPDRs S&P China (AMEX: - ) darted 5.55, or 7.41%, to 80.43 in double average volume. PowerShares Golden Dragon Halter USX China (AMEX: - ) added 1.40, or 5.3%, to 27.78. IShares FTSE/Xinhua China 25 Index (NYSE: - ) leapt 9.36, or 6.52%, to 153.

Lively Insurance Industry

China Life gapped up 10.93, or 16%, to 78.08 on five times normal volume. The country's largest life insurer said earnings shot up 160% in the first half of this year, thanks to robust investment returns and rising premiums. Net profit for the first half of 2007 was $3.08 billion, up from $1.19 billion a year ago.

Net investment income more than doubled, from $1.49 billion to $3.18 billion. Total premiums rose 14.6% to $7.78 billion.

The company benefited from the growing number of wealthy Chinese buying more insurance policies and the government easing rules to allow them to invest more in domestic stocks and higher-yielding securities. The government allowed insurers to increase their total exposure to overseas investments from 5% to 15%.

Natural Resource Growth

Aluminum Corp. of China, known as Chalco, vaulted 13.33, or 25%, to 67.35. Volume exploded to seven times the usual.

It was reported last week that the company intends to pay $1.05 billion for a controlling stake of 49% in Yunnan Copper Industry. Chalco's profit dipped 7% year over year in the first half of 2007, but revenue surged 38% to $2.4 billion.

"Earnings' prospect in (the second half of 2007) will likely be stronger than (the first half) due to better economies of scale and rising contributions from newly to-be-acquired aluminum assets," analyst Helen Wang of DBS Group Research wrote in a report.

PetroChina (NYSE: - ) gapped up 5.13 to 149.73. It recovered its 10-week moving average and may be forming the right side of a base-on-base pattern that started at the end of December.

The country's largest listed oil and gas producer by capacity said last Thursday that first-half net profit grew an unexpected 1.4% to $10.76 billion.

The firm also said it agreed to buy two oil-exploration units from its state-owned parent, China National Petroleum Corp., for $218 million. Those units are exploring marginal oil reserves in Xinjiang province.