PetroChina posted an 8% drop in first-quarter profit to CNY36 billion on weak demand for oil products. “Due to the macro-economic situation, there was weak demand for refined products and the chemicals market remains in a downturn,” PetroChina said. Oil and gas output climbed 2.8% to 355.3 million barrels of oil equivalent (BOE) in the first three months of this year. Crude oil output hit 231 million barrels, up 1.8% from last year. The average realized crude price was USD103.08 a barrel, down 2.3%. One big weight on profit was a CNY4.25 billion rise in operating loss on its gas import business to CNY14.5 billion. Also weighing on profit was a CNY3.94 billion cut in operating profit at its fuel distribution business to CNY2.12 billion, due to weak domestic motor fuel demand, resulting in a 4.3% fall in sales volume and lower profit margin. A third factor was a rise in operating loss at its chemicals division of CNY2.77 billion to CNY3.18 billion. The oil and gas production division, which earns the bulk of profit, recorded a 5.6% drop in operating profit to CNY57 billion. A board meeting passed a resolution to promote Deputy Chairman Zhou Jiping to the Chairman position.

Sinopec Corp posted a 25% rise in first-quarter net profit to CNY16.7 billion as improved refining margins offset lower profits from exploration and production. Sinopec should benefit from China’s market-oriented fuel pricing reform, analysts say. The main driver was its refining operation, which turned in an operating profit of CNY2.2 billion, an CNY11.4 billion improvement from a CNY9.2 billion loss in the year-earlier quarter. This more than offset a CNY3.3 billion decline in operating profit of oil and gas production to CNY16.23 billion, a CNY1.15 billion profit decline in chemical manufacturing to CNY164 million, and a CNY1.15 billion profit fall in fuel marketing to CNY9.13 billion.

CNOOC’s output jumped 17.3% to 93.6 million barrels of oil equivalent (BOE) in the first quarter from a year earlier, which helped deliver a 13.3% rise in oil and gas sales. “I am very glad to say that the company made significant progress in exploration and production in the first quarter,” said Li Fanrong, CNOOC’s CEO. The Q1 figures were the first to include Nexen in its balance sheet. CNOOC announced in January that it aimed to produce 338 million to 348 million BOE this year, an increase of up to 2% from the previous year.

Wealthy Hong Kong and mainland buyers are now eyeing Britain’s most expensive mansion. The house on Carlton House Terrace in central London has a price tag of GBP250 million. The asking price is 700 times more than the GBP370,000 average property value in the capital and is set to smash Britain’s price record. With 50,000 sq ft of living space, it is 30 times bigger than a typical London family house and the second largest mansion in London after Buckingham Palace. The Grade I-listed Regency property is close to Buckingham Palace, with views of St James’s Park. It is in the hands of an elderly member of a Middle East royal family who is discreetly trying to find a buyer.

Yum’s fiscal first quarter profit fell 27% to USD337 million after its China sales were hit by quality concerns over chickens since the end of last year. Same-store sales in China dropped 20% from a year ago to USD1.15 billion, after the government stepped up investigation into poultry product safety violations among its chicken suppliers, the company, which owns KFC, Pizza Hut and Taco Bell, said in a statement. “As anticipated, intense media attention surrounding poultry supply in China significantly impacted KFC sales and profit,” David Novak, Chairman and CEO of Yum, said. Yum’s operating profit in China dived 40% to USD154 million. China, however, remains Yum’s biggest single market, contributing 45% of its sales in the three months ended March 23. But the outbreak of the bird flu since early April caused Yum to predict another 30% annual drop in KFC’s sales this month in China.

Global luxury-goods companies have been persistently overcharging their best customers in China, the Wall Street Journal reports, but now that Chinese appetite wanes they might have to lower their prices. A comparison of three models from Mercedes-Benz, Audi and BMW shows that, on average, listed prices of luxury sedans in China are 64% more expensive than similar vehicles sold in the U.S., according to Bernstein Research. The gap is even bigger when it comes to imported vehicles. Prices in China already include consumption taxes and value-added taxes, while the ones sold in the U.S. don’t. But even stripping out all the taxes, those three vehicles are still an average of 37% pricier in China. The makers of the three cars argue vehicles in China include more features, but that alone may not explain the price difference. LVMH said China sales were “flattish” in the last year or so. The way to win back price-sensitive Chinese consumers, who are serious bargain hunters even when they shop for a USD2,000 bag, may be lower prices. The same Gucci Joy Boston handbag was 54% more expensive in China than in France in 2009. The premium widened to 62% in 2012, according to European broker Exane BNP Paribas, even though an appreciating yuan should have made imported goods cheaper. Buying abroad allows Chinese consumers to get around the “China premium.” That is a problem for luxury-goods makers, which could see their stores in China reduced to window displays while Chinese customers buy abroad.

The China Securities Regulatory Commission (CSRC) announced it was in talks with international index compilers to join the global investment system, but market watchers said it was vital that current investment quotas for its Qualified Foreign Institutional Investor (QFII) and Renminbi Foreign Institutional Investor (RQFII) schemes be raised. The integration proposal is still at the discussion stage, and the main issues yet to be resolved focus on foreign exchange controls and possible fiscal taxation adjustments. One of CSRC’s potential cooperative targets is MSCI, a public company listed on the New York Stock Exchange. “If the MSCI index anchors China’s A shares, over CNY1 trillion worth of funds could roll in the mainland stock market. MSCI has more than 7,500 clients, mostly global pension funds and boutique hedge funds, and the joining of Chinese mainland shares could attract large inflows of exchange traded funds, and bring liquidity to the market. According to an insider, the biggest obstacle between the two sides reaching agreement had been China’s closed capital account. Currently the only way to invest in the Chinese stock market is to apply for a quota under the QFII scheme. Zhao Xiaoyun, Chairman of Global Trend Investment Management Co said: “In order to attract more international funds to buy A shares, QFII quotas and the series of investment limitations should be broken down.” By the end of March, the SAFE had an approved total quota of USD41.7 billion for 197 foreign institutions. The approved RQFII quota was CNY70 billion at the end of March, the China Daily reports.