Singapore Revalues Dollar; Stronger Yuan

Mayank Mehta
14 Apr, 2010
New York City

Stocks in China region traded under pressure after March real estate prices increased 11.7%. The sharp rise in prices only fueled worries of additional government steps to curb lending. Singapore de-facto revalued its dollar lending a support to the imminent yuan strengthening arguments.

[R]9:00 PM Hong Kong, China – Stocks in China region traded under pressure after March real estate prices increased 11.7%. the sharp rise in prices only fueled worries of additional government steps to curb lending. Singapore de-facto revalued its dollar lending a support to a growing speculation that China is close to revalue yuan in less than sixty days.[/R]

Stocks in Shaghai traded volatile after talks of China letting the currency rise as much as 3% before the end of June gathered momentum. Singapore revalued its currency higher and expanded the trading band, a two-step move for the first time in 40 years ahead of possible yuan revaluation.

The Monetary Authority of Singapore said that it will allow “gradual appreciation” in its currency and permit wider band that will leave a room for more appreciation. The combined move is perceived to ward-off the yuan revaluation that may come as early as in June.

Other Asian currencies, including Taiwan dollar, Malaysian ringitt, South Korean won, Indian rupee and Indonesian rupiah are expected to move higher in the next few weeks.

China property prices surged 11.7% in March from a year ago according to the latest data released by the National Bureau of Statistics. The price increase is an average of residential and commercial prices in 70 largest cities.

Prices surged the most in Hainan, an island located in South China Sea. New home prices in Haikou located on the island surged 65% and prices for new and existing homes increased 53.9%, the largest in the nation. New home prices in Sanyan increased 52.1%.

Hang Seng index in Hong Kong increased 17.90 or 0.08% to 22,121.43 and CSI 300 index in China higher 11.99 or 0.35% to 3,403.71.

China approved the price increase of gasoline and diesel to pass some of the recent gains in crude oil prices. The National Development and Reform Commission noted on its Web site that retail prices will increased by 320 yuan per ton.

Separately, the NDRC said in a separate statement that wholesale price of jet fuel was increased 10% to between 5,460 yuan and 6,170 yuan.

Refiners Sinopec and China Petroleum declined after the lower than expected price increase of 400 yuan.

Shanghai Movers

China Southern Airlines Company Limited added 0.2% to 8.86 yuan after the carrier expects sales and passenger traffic to grow by more than 10% this year.

China Merchants Bank Co., Ltd closed unchanged at 16.14 yuan after the commercial bank said first quarter revenues rose 30% to 15.5 billion yuan from 11.9 billion yuan a year ago. Net profit in the year rose 40.5% to 5.9 billion yuan compared to net profit of 4.2 billion yuan a year ago.

Gemdale Corporation fell 0.8% to 13.08 yuan after the company announced that it plans to issue up to 400 million shares with par value of 1 yuan per share and raise up to 4.8 billion yuan through a private placement.

Poly Real Estate Group Co., Ltd dropped 0.8% to 18.79 yuan after on the concern that the government will take additional steps to restrain the property market after prices rose at a record pace in March.

Zijin Mining Group Co., Ltd the gold producer rose 2.9% to 8.85 yuan after gold prices increased more than 0.5% in the international trading.

HK Movers

Bank of China Limited fell 0.7% to HK$4.25.

China Petroleum & Chemical Corporation closed unchanged at HK$6.71.

Dongfeng Motor Group Company Limited fell 3.3% to HK$12.60 after the company said profit rose 58% last year after government offered tax incentives to new car buyes.

Industrial and Commercial Bank of China Limited rose 0.4% to HK$6.20.

PetroChina Company Limited slipped 0.6% to HK$9.33 after the company has listed its 55% stake in PetroChina Jiangsu LNG Co., Ltd for sale for 500 million yuan.