Shanghai Index Rises; HK Index Falls

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
05 May, 2010
New York City

Stocks in Hong Kong fell sharply following losses in global markets. However, stocks in Shanghai rebounded. Short sales interests on Chinese stocks rose to the highest level in 26 months. PetroChina Co begins construction of refinery in the Northwest China to increase capacity three-fold.

[R]8:00 PM Hong Kong, China – Stocks in Hong Kong fell sharply following losses in global markets. However, stocks in Shanghai rebounded. Short sales interests on Chinese stocks rose to the highest level in 26 months. PetroChina Co begins construction of refinery in the Northwest China to increase capacity three-fold.[/R]

Shanghai Composite Index rebounded from its lowest level in seven months. The index rose 21.88 or 0.8% to close at 1857.15 reversing the recent losses of as much as 2.3%.

Hang Seng index in Hong Kong decreased 435.51 or 2.10% to 20,327.54 and CSI 300 index in China higher 16.94 or 0.56% to 3,036.39.

Foreign investors of Chinese stocks were short selling their positions through a yuan-dominated Exchange Traded Fund at the highest price in more than two years on concern that property curbs and the tightening monetary policy will slow the economy.

The ratio of short selling to total turnover on the iShares FTSE/Xinhua A50 China Index ETF reached 39% yesterday according to data compiled by Bloomberg. This is the highest level reached since February 19, 2008.

PetroChina Co, the largest Chinese oil explorer has begun construction at Ningxia refinery to increase refining capacity more than three-fold at a cost of 7.4 billion yuan to meet increasing fuel demand in Northwest China.

This will increase the plant capacity to 5 million tons per year or 100,000 barrels per day under a contract signed on April 29, parent company China National Petroleum Corporation said on its website today.

New Century Shipbuilding Ltd, the fifth-largest shipbuilder in China yesterday cancelled a $483 million IPO that would have been this year’s biggest offering for Singapore. The company’s website in Singapore’s exchange said it would consider restarting the offer in the near future without citing any reason for the withdrawal.

Shanghai Movers

Anhui Jianghuai Automobile Co Ltd, the light-truck exporter rose 0.9% to 8.19 yuan.

China COSCO Holdings Company Limited rose 0.08% to 12.12 yuan after the operator of dry-bulk ships announced acquisition of 13.7% effective interest in Sigma Enterprises Limited.

Industrial and Commercial Bank of China Limited fell 0.4% to 4.47 yuan after the listed lender set its 2010, 11 and 12 capital adequacy ratio targets as 12.4%, 12.3% and 12.3% respectively, reports China Business News, citing an announcement released by ICBC.

Ping An Insurance (Group) Company of China, Ltd fell 0.3% to 49.11 yuan after the insurer said CSRC had approved its plan to issue 299.09 million H-shares in exchange for 520.4 million shares of Shenzhen Development Bank held by Newbridge Capital.

SAIC Motor Corporation Limited decreased 1.4% to 18.15 yuan after the carmaker said vehicle sales in China in April rose 40% from a year earlier to 1.39 million units, the official Xinhua news agency reported.

ZTE Corporation dropped 2.3% to 35.93 yuan after the phone-equipment maker said the telecom regulatory authority of India is reported to have ordered telecom operators to terminate orders from Chinese providers of telecom equipment from April 28 due to fears that telecoms equipment made by Chinese companies may contain spyware, reports yicai.com, citing a report by Indian business daily.

HK Movers

Bank of China Limited fell 1.5% to HK$3.95.

Cheung Kong (Holdings) Limited dropped 1.8% to HK$93.45 after the real estate company said it will raise sale prices at a new project by 6.8% from May 10.

Geely Automobile Holdings Limited the automaker declined to HK$3.11.

Hutchison Whampoa Limited fell 0.3% to HK$53.05 and the company is keen on investing in Israeli technology companies specializing in oil-sands and water technologies, Israel''s Finance Ministry said on Tuesday.