HK, Shanghai Stocks Rebound

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

Sale of new homes fall in Shanghai. China Petroleum and Chemical Corp received regulatory clearance for 20 billion yuan bond sale. China Railway Group signs contracts worth 69.22 billion yuan.

[R]6:00 PM Hong Kong, China – Sale of new homes fall in Shanghai. China Petroleum and Chemical Corp has received regulatory clearance for 20 billion yuan bond sale. China Railway Group signs contracts worth 69.22 billion yuan.[/R]

Hang Seng index in Hong Kong increased 229.74 or 1.17% to 19,944.94, and CSI 300 index in China rose higher 56.63 or 2.09% to 2,771.35.

Xinjiang-based companies rallied in Shanghai trading after China Business News reported earlier the central government is scheduled to hold a meeting this week to develop this autonomous region.

The consumer price index may rise about 3% in both May and June, the level targeted by the government, the National Development and Reform Commission said on its website today. This was due to bad weather, raw materials costs, and commodity prices, the NDRC said.

This is the level that many economists feel could lead to the country’s first interest rate hike since the financial crisis.

Chinese lenders flooded the market with money to drive a rebound after the government scrapped lending controls in late 2008. The current one-year lending rate is 5.31%.

Sales of new homes fell 16% in Shanghai last week to the lowest levels since 2005, China Business News reported on its website today based on data compiled by property consultant Youwin.com.

Chongqing’s Liangjiang district has won approval to become a new economic zone similar to those of Shanghai’s Pudong district and Tianjin’s Binhai district, enjoying preferential policies, the 21st Century Business Herald reported today. China’s State Council, the nation’s Cabinet approved the plan on May 7 as per the report.

China’s Commerce Ministry on Monday called for an open, fair and transparent environment, in its first response to the reported restrictions on the import of Chinese telecom equipment by India.

‘We hope that policies to be launched are fair to all enterprises and should not discriminate against Chinese enterprises’, spokesperson Yao Jian said at a press conference in Beijing on Monday.

Hang Seng index in Hong Kong increased 229.74 or 1.17% to 19,944.94, and CSI 300 index in China rose higher 56.63 or 2.09% to 2,771.35.

Shanghai Movers

China Petroleum & Chemical Corporation closed unchanged at 8.78 yuan after the refiner received approval from China''s securities regulator to sell up to 20 billion yuan ($2.93 billion) worth of bonds on the Shanghai Stock Exchange.

China Railway Group Limited advanced 1.5% to 4.58 yuan after the railroad builder said its units signed 16 contracts worth a combined 69.22 billion yuan ($10.15 billion) to build railways, stations and highways.

China Shipping Development Company Limited, the shipping group, rose 2.0% to 9.47 yuan.

Faw Car Co., Ltd the manufacturer of vehicles and related accessories climbed 3.3% to 16.80 yuan.

SAIC Motor Corporation Limited, the automaker, added 2.4% to 16.60 yuan.

Tianjin Zhonghuan Semiconductor Co., Ltd rose 0.1% to 12.62 yuan.

Wuliangye Yibin Co., Ltd rose 0.1% to 23.72 yuan after the liquor maker was upgraded to “buy” from “add” at Southwest Securities.

HK Movers

Bank of Communications Co., Ltd added 0.8% to HK$8.01.

CNOOC Limited the offshore oil explorer fell 1.1% to HK$12.48.