3-Day Rally in HK Stocks

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

Hong Kong stocks advanced while Shanghai Composite Index trimmed gains and fluctuated as property stocks and banks dropped while drug-makers traded higher on the prospect of increased government spending.

[R]5:00 PM Hong Kong, China – Stocks in Hong Kong closed higher for the third day in a row and indexes in Shanghai settle. CCB branch in Zhejiang implements tougher mortgage policies. BYD and Daimler agree to form equally owned joint venture. Agriculture Bank of China is seeking to raise as much as $30 billion.[/R]

Hong Kong stocks advanced while Shanghai Composite Index trimmed gains and fluctuated as property stocks and banks dropped while drug-makers traded higher on the prospect of increased government spending.

Earlier, Xinhua News Agency said real estate policies are soft at the local government level and Beijing News reported that apartment prices may drop as much as 30% in three months.

Hong Kong stocks gained for the third day in a row led by rally in commodity stocks, after China reaffirmed its support for Europe boosting global economic outlook.

Hang Seng index in Hong Kong increased 335.34 or 1.73% to 19,766.71 and CSI 300 index in China lower 9.68 or 0.34% to 2,850.30.

Initial public offerings in the first five months in the current year are enjoying the best gains of all offering around the world, despite the weak broader indexes.

Individual investors have redirected their investments in new offerings as the regulators curb speculative lending and banks offer low deposit rates.

Beijing-based Agricultural Bank of China Ltd is seeking to raise at least $30 billion in Shanghai and Hong Kong, according to the Beijing Times.

PetroChina Co will accelerate coal-bed methane production in the next decade in an effort to reduce reliance on coal and meet local demand for cleaner fuel.

Annual output is expected to cross 10 billion cubic meters by 2020 from about 4 billion cubic meters by 2015, Jie Mingxun, President of the company’s coal-bed methane unit said in an interview in Beijing today.

China has reserves of gas of about 38 trillion cubic meters, PetroChina’s Jiang had said in March. Gas in shale and tight gas held between rocks are together known as unconventional gas resources.

Shanghai Movers

China Vanke Co., Ltd, the property developer, fell 1.3% to 7.43 yuan.

China Construction Bank Corporation slipped 0.4% to 5.01 yuan and the bank has started to implement differentiated mortgage loan interest rates for first home buyers on May 26, ending the practice of offering 30% preferential interest rates for all first-time home buyers, reports Daily Business.

Datang International Power Generational Co., Ltd, the electricity producer, fell 1.3% to 7.48 yuan.

GD Midea Holding Co, the appliance maker, fell 1.2% to 11.80 yuan.

Poly Real Estate Group Co., Ltd dropped 2.4% to 11.44 yuan.

Zhejiang Transfar Co., Ltd dropped 1.3% to 141.14 yuan.

[HK Movers

BYD Company Limited increased 9.1% to HK$63.85 after the carmaker and Daimler AG signed a contract creating equally owned research and technology joint venture. BYD and Daimler will invest 600 million yuan or $87.7 million as registered capital for the venture.

China Overseas Land & Investment Limited fell 0.7% to HK$15.30.

China Resources Land Limited, the state-controlled developer, fell 3.9% to HK$14.58.

Lenovo Group Limited rose 0.2% to HK$4.78 and the maker of personal computers said the company was profitable in each of the last three quarters.