7-Day Rally in HK Stocks; Shanghai Falls

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
17 Jun, 2010
New York City

Stocks in Hong Kong closed higher for the seventh day in a row and closed lower in Shanghai. Henderson Land Development in Hong Kong booked a loss after 20 apartment sales were cancelled. Sino Biopharmaceutical plans to raise $79 million.

[R]5:00 PM Hong Kong, China – Stocks in Hong Kong closed higher for the seventh day in a row and closed lower in Shanghai. Henderson Land Development in Hong Kong booked a loss after 20 apartment sales were cancelled. Sino Biopharmaceutical plans to raise $79 million.[/R]

Stocks fell in China after the markets opened today following a three day break for holidays. CSI 300 index in China slipped lower 0.58% or 16.13 to close at 2,742.73.

However stocks in Hong Kong traded higher pushing the Hang Seng index to its straight seventh day rally amid corporate growth outlook. The Hang Seng Index climbed 0.38% or 76.25 to close at 20,138.40.

Thirteen of the biggest money managers, such as AllianceBernstein Holding LP and BlackRock Inc, are switching over to high-yield bonds and emerging markets from equities, according to a survey by HSBC Holdings Plc.

“Fund managers are becoming less bullish on equities as the European debt crisis continues to escalate and impact the global economic recovery,” the London-based bank’s head of global investments for Australia, Charles Genocchio, said in a report yesterday.

HSBC quarterly survey, conducted in April and May, queried 13 of the world’s top fund managers by assets under management and money flows.

Hong Kong Exchanges & Clearing Ltd has met with mining companies in Ulaanbaatar, seeking to list in Hong Kong, said Chief Marketing Officer, Lawrence Fok in the Mongolian capital yesterday.

Hong Kong Exchanges, which operates Asia’s third largest stock market, is processing more than 70 public offering applications, Fok said in an interview in Ulaanbaatar yesterday.

The cancellation of sale of 20 apartments, in the Conduit Road project of Henderson Land Development Co, marks a setback for the company as regulators try to cool the city’s property market.

Most buyers pulled out of the 39, Conduit Road project in Hong Kong’s Mid-Levels district, the company said in a filing to the stock exchange yesterday, in response to government demands for more information on the transactions.

The company said it will record a charge of HK$734 million in its half-year results as a result.

Honda Motor Co, grappling with a production crisis in China is considering steps to improve communications between managers and employees.

“We couldn’t predict the strikes and we need to have more avenues for managers to listen to employees regularly,” Yoshiyuki Kuroda, a spokesman for the company said over phone yesterday.

At present there are no effective channels in China for workers and management to negotiate, since discussions are now handled by government-linked union officials who are not elected by the workers.

China, the world’s second-largest corn consumer is expected to buy more than 1 million tons of the product in the next year and a half, in addition to purchases made this year, the U.S. Grains Council said.

“China’s economic growth will boost its demand for meat thus creating an excellent opportunity for corn exporters to sell more to China. I do believe that in the next six to 18 months, China will undoubtedly import more than a million tons of corn and I wouldn’t be surprised to see it to be double that amount,” said Thomas Dorr, President of the council in an interview from Washington on Wednesday.

Shanghai Movers

China Shenhua Energy Company Limited fell 0.09% to 23.33 yuan.

SAIC Motor Corporation Limited added 1.0% to 12.53 yuan after the Shanghai General Motors Co., a joint venture between General Motors Co. and SAIC, aims to reduce fuel consumption in its models 15% by 2015 as it introduces 12 new engines.

China Shenhua Energy Company Limited fell 0.09% to 23.33 yuan.

China Railway Group Limited closed unchanged at 4.57 yuan after the construction company said it is planning a private share placement, without revealing the size of the share offering.

China Shenhua Energy Company Limited dropped 0.09% to 23.33 yuan after the coal producer said coal sales rose 3.7% from a year ago to 22.7 million tons in May and output dropped 0.5% to 18.1 million tons.

Dongfang Electric Corporation Limited, the maker of power equipment, increased 2.6% to 49.68 yuan.

Shanghai Zhenhua Heavy Industry Co fell 0.4% to 6.73 yuan after the maker of container cranes announced that it has signed a $110 million contract with NPCC to build a 3,800-ton heavy lift cable laying vessel.

[HK Movers

CNOOC Limited increased 2.4% to HK$13.44 after the offshore oil explorer was upgraded to “overweight” from “neutral” at HSBC Holdings Plc.

Henderson Land Development Co., Ltd dropped 2.0% to HK$46.80 after the builder said it will book a loss of HK$734 million ($94.2 million) in the first half ending June 30 from the cancellation of apartment sales at its luxury residential project at Hong Kong''s upscale Mid-Levels district.

Sino Biopharmaceutical Limited dropped 8.7% to HK$3.36 after the drug distributor said on Thursday it would sell about HK$620 million ($79 million) worth of new shares to its controlling shareholder, raising capital to fund future acquisitions, according to a Reuters report.

Yue Yuen Industrial (Holdings) Limited added 4.0% to HK$24.65 after the supplier of branded athletic and casual shoes on Thursday announced that its net profit for the first half of this fiscal slid 3.2% to $210.8 million compared with $217.7 million a year earlier, mainly due to an increase in tax expenditure.