China Indexes Rebound; China-US Talks

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

Market indexes in Shanghai,Hong Kong surge on the recovering global optimism. Strategic talks between China and US begin in Beijing today as China resists pressure to revalue the yuan. Second land auction in Hong Kong fetches below estimated price. New home prices drops 16% in the week ended May 23.

[R]5:00 PM Hong Kong, China – Market indexes in Shanghai, Hong Kong surge on the recovering global optimism. Strategic talks between China and US begin in Beijing today as China resists pressure to revalue the yuan. Second land auction in Hong Kong fetches below estimated price. New home prices drops 16% in the week ended May 23.[/R]

Stocks in China rallied on expectation government will hold back further measures to cool property market given Europe’s credit crisis, driving the benchmark Shanghai Composite Index to its biggest gain in nearly six months.

The Shanghai index surged 3.1%, the most since November 30, after falling 4.2% last week and the CSI 300 Index galloped 3.8%.

The Hang Seng China Enterprises Index, which tracks the H-shares of the Hong Kong-listed Chinese companies, also advanced 2% to 11,263.98 after stocks related to property and construction materials surged in Hong Kong.

China will move independently and gradually in making changes to the yuan exchange rate mechanism, said President Hu Jintao as the strategic talks with the US started in Beijing today.

China’s Vice premier Wang Qishan said at the start of the strategic meeting today that the nation has pressed the US to provide a timetable to relax constraints on technology exports to China.

Earlier, Commerce Secretary Gary Locke had pledged to scale back the number of products covered by these restrictions.

Hong Kong government offered today auction of a second piece of land to cool property market.

The 8,900 second quarter meter site, that doesn’t offer a sea view, is in the Fanling area of the new territories in northern Hong Kong and was expected to fetch about HK$1.37 billion.

However the successful bidder, Hong Kong Ferry (Holdings) Co, a subsidiary of Henderson Land development Co, agreed to pay HK$1.33 billion for the site.

Hong Kong Ferry plans to build 700 flats of 600 square feet each and estimates the total investment of HK$2.3 billion, according to group General Manager David Ho after the auction. The development plan exceeds the minimum 34,290 square feet gross floor area to be built by the successful bidder according to the auction terms.

New home prices dropped 16% in the week ended May 23 to below 20,000 yuan per square meter, property consultant Shanghai UWin Real Estate Information Services Co said today in a statement.

Hang Seng index in Hong Kong increased 121.93 or 0.62% to 19,667.76 and CSI 300 index in China edged higher 104.68 or 3.78% to 2,873.47.
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Shanghai Movers

Air China Limited added 7.3% to 11.26 yuan after the carrier plans to launch low-priced tickets in Beijing and Guangdong province in order to grab market share from the big three Chinese airlines, reports Beijing Business Today, citing sources from the company.

China Construction Bank Corporation, the lender, rose 1.7% to 5.12 yuan.

GD Midea Holding Co, the appliance maker, surged 10.0% to 11.99 yuan.

Sinochem International Corporation, the chemicals trader, rose 3.4% to 11.25 yuan.

HK Movers

China Southern Airlines Company Limited, the carrier, rose 6.7% to HK$3.34.

China Resources Land Limited added 7.6% to HK$15.02.

China Resources Enterprise, Ltd rose 2.2% to HK$25.50 after the investment company reported first quarter revenues rose 25% to HK$21.5 billion from HK$17.2 billion a year ago. Net profit in the quarter rose 794% to HK$3.73 billion compared to net profit of HK$417 million a year ago.

Sun Hung Kai Properties Limited, the developer, rose 2.1% to HK$103.40.