Rusal (Hong Kong stock code 486), the world’s biggest aluminum producer posted strong, above expectations 1H earnings, mainly due to aluminum price growth in 1H 2010, average cash cost decrease and aluminum production growth.

The company says it swings to 1H net profit of US$1.27 billion (vs 1H09 net loss of US$868 million), marking 85% of full-year earnings now pegged by Thomson Reuters. To attract HK investors, Rusal proposes to reduce board lot size of HK-traded shares to 6,000 shares from 24,000, which would lower minimum amount needed to buy one lot to HK$47,700.

Early in January Rusal raised up to HK$20.13 billion (US$2.6 billion) through its Hong Kong initial public offering . The IPO at HK$10.80 was only available to professionals and big investors because the minimum subscription was HK$1 million and the lot size of the stock was 24,000 units. Hong Kong SFC set such restriction on Rusal in order to “protect local retail investors”, amid concerns over Rusal’s $14.9 billion debt. A source said The Hong Kong Stock Exchange’s listing committee did not agree with the SFC, because “It should be the investor, and not the regulator, who decides whether to invest.”

The stock rose 4.1% to HK$7.97  in morning session overnight Tuesday, but was still 26.2% lower than its IPO price.

Remark: USD1 = HK$7.773