Hang Seng Drops 1.1%; GM China Sales Rise

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
02 Jul, 2010
New York City

China stocks rallied moderately while stocks in Hong Kong declined 1%. China revises its 2009 economic growth to 9.1% from 8.7%. General Motors and its joint ventures sell more vehicles in China than U.S. in the first half of the year. Gujing Distillery forecasts first-half net profit to triple.

[R]5:00 PM Hong Kong, China – China stocks rallied moderately while stocks in Hong Kong declined 1%. China revises its 2009 economic growth to 9.1% from 8.7%. General Motors and its joint ventures sell more vehicles in China than U.S. in the first half of the year. Gujing Distillery forecasts first-half net profit to triple.[/R]

Stocks in China gained marginally following seven days of losses, after nearly sending the benchmark index to its largest weekly decline in 16 months.

Hong Kong stocks fell on the weakness in China stocks and continued global economic worries.

The Hang Seng Index dropped 1.11% or 223.67 to close at 19,905.32. The CSI 300 Index climbed 0.32% or 8.03 to close at 2,534.10.

Trading in the shares of Bank of China in Hong Kong was suspended today pending the release of price-sensitive information, according to a statement by the bank to the city’s stock exchange today.

China revised its 2009 growth estimate from the previously announced 8.7% to 9.1% after closer verification of preliminary data released on January 21 showed that output by industrial and services companies grew faster than had been estimated originally.

The expansion puts the value of GDP at 34.05 trillion yuan after raising the pace of industrial expansion to 9.9% and services expansion to 9.3%, the National Bureau of Statistics said in a statement on its Web site today.

Sales of vehicles in China in six months to June by General Motors and its joint ventures totaled 1.21 million units, topping the U.S. deliveries of 1.08 million units, based on data reported by the Detroit-based company.

In June alone the company sold 176,486 vehicles in China including both locally made and imported vehicles, up 23.2% from a year earlier.

“This would be the first time any overseas market has consistently outsold the domestic market in General Motors’ 102-year-old history,” said Michael Albano, a Shanghai-based spokesman of the company.

Sumitomo Mitsui Asset Management Co’s biggest China fund, The New China Fund, is focusing on consumer stocks in China as it feels that demand for these stocks will go up in the world’s fastest growing Asian economy.

The New China Fund, with over $800 million of assets under management, is buying small cap retailers, supermarkets, education and internet related shares, said the fund’s CEO Yoshinobu Uehara in an interview in Tokyo.

In addition to consumer shares, the fund currently holds stocks of China Life Insurance Co, China Mobile Ltd, and Bank of China Ltd, according to the company’s weekly report.

Foxconn Technology Group will move a major part of its production to Hebei province in northern China from the existing location of Shenzhen in the south by the end of the year, Shanghai Daily reported today, citing company spokesman Tong Wenxin.

Shanghai Movers

Anhui Gujing Distillery Company Limited fell 1.6% to 40.25 yuan after the company predicted that net profit for the first half of the year and earnings per share will triple year-on-year to 107 million yuan and 0.45 yuan, respectively, according to a company announcement.

Bank of China Limited rose 0.2% to 3.40 yuan after the bank plans to raise up to 60 billion yuan in an additional share offering, Caixin Online reported.

Beijing Capital Development Co., Ltd surged 9.9% to 14.54 yuan after the company said that it acquired three plots of land in Guiyang city''s Nanming district, according to a company filing.

China Petroleum & Chemical Corporation rose 0.2% to 7.83 yuan after the oil refiner said Sinopec Corp. plans to bring a commercial crude oil reserve tank in southwest China into operation before September of 2011.

China South Locomotive & Rolling Stock Corporation Limited increased 3.9% to 5.00 yuan after the company said it will pay cash dividends of 0.04 yuan per share for the 2009 fiscal year, according to a company announcement. The ex-dividend date is July 8, and the cash dividend delivery date will be July 14.

Gemdale Corporation advanced 4.6% to 6.33 yuan after the property developer announced that it has spent a total of 383 million yuan to purchase a 51% stake each in two unfinished property projects in Zhuhai of Guangdong Province and Yantai of Shandong Province.

Industrial and Commercial Bank of China Limited rose 0.5% to 4.06 yuan after the company plans to issue 22 billion yuan worth of subordinated bonds in order to boost its tier-2 capital, a report published on 163.com, citing Reuters which quoted two unnamed sources familiar with the matter.

Zhejiang Juhua Co rose 4.4% to 9.16 yuan after the manufacturer of chemical products said first-half net income may rise more than 200% from a year earlier.

HK Movers

Aluminum Corporation of China Limited fell 3.3% to HK$5.82.

China Coal Energy Company Limited fell 4.4% to HK$9.45.