This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

PetroChina, Sinopec Nicked by New Tax

NEW YORK ( TheStreet) -- Shares of China-based petroleum companies fell in morning action on the New York Stock Exchange Friday on the Chinese government's plans to introduce a new national resources tax on coal, oil and gas exploration in the country.

PetroChina (PTR - Get Report), an oil and gas producer and seller, China Petroleum & Chemical Corp (Sinopec) (SNP - Get Report), a Chinese energy and chemical company, and Sinopec Shanghai Petrochemical (SHI) a Chinese petrochemicals company, lost 0.13%, 1.67% and 1.53% of their respective market values. In comparison, Dow Jones Industrial Average and S&P 500 Index gained 1.20% and 0.94%, respectively, on Thursday.

Reports from China's Ministry of Finance indicate that 5% benchmark will be used with certain variations for each commodity. Beijing has already introduced a 5% tax in Xinjiang, one of the oil-rich regions in China's western provinces. The government wants to raise funds in order to boost development in some of China's poorer regions, especially in the west.

But the move is also part of an effort to alleviate tensions among some of the minority groups in China. Xinjiang is home to a huge Muslim population, and was the site of deadly rioting that left almost 200 dead last July.

"If it goes nationwide this year and the companies get a full year of impact from the tax, it may take down PetroChina's earnings per share by 12% and Sinopec 7%," Brynjar Eirik Bustnes, an analyst at JPMorgan Securities Ltd. in Hong Kong, told Bloomberg.

China's National Development and Reform Commission estimates the resource tax could generate $580-$730 million, according to Xinhua News Agency.

More recently, resource taxes have been proposed in Australia, where the incoming Prime Minister Julia Gillard reduced the proposed taxes and received support from mining giants BHP Billiton (BHP) and Rio Tinto (RTP).
Karvy Global Services (, a subsidiary of the Karvy group (, provides specialized research in asset classes including stocks, mutual funds and insurance to leading Wall Street firms.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BHP $26.68 -1.11%
PTR $71.21 1.32%
SNP $61.88 0.44%
SHI $36.43 0.80%
AAPL $118.30 0.42%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs