7-Day Decline in China Indexes

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

Stocks in China fell for the seventh straight day after a report showed that manufacturing declined more-than-expected in June. Many provinces and cities in China raise minimum wages. Aluminum Corp of China cuts spot alumina price. BoC extended $23 billion bonds maturity.

[R]5:00 PM Hong Kong, China – Stocks in China fell for the seventh straight day after a report showed that manufacturing declined more-than-expected in June. Many provinces and cities in China raise minimum wages. Aluminum Corp of China cuts spot alumina price. BoC extended $23 billion bonds maturity.[/R]

Stocks in China fell for the seventh consecutive day after a report showed that manufacturing dropped more-than-expected in the month of June. The Shanghai Composite Index declined for the seven-day in a row, the longest since eight-day decline ending December 31, 2008. The index retreated 1% or 24.58 to close at 2,373.79.

The CSI 300 Index slid 1.44% or 37.00 to close at 2,526.07.

Purchasing Manager’s Index declined for a second month falling to 52.1 in June from 53.9 in May even though any figure above 50 indicates the economy is expanding. Of the 11 sub-indexes in the measure, input prices had the greatest fall to 51.3 in June from 58.9 in May. The output index fell to 55.8 from 58.2 in May, the Federation of Logistics and Purchasing said in its statement released in Beijing today.

Many provinces and cities in China raised their minimum wages by as much as a third today after Premier Wen Jiabao called for measures to avoid growing worker unrest to escalate.

The lowest monthly salary has been raised from 800 yuan to 960 yuan per month according to the city government’s Web site. Henan, the nation’s most populous province in central China has raised its minimum wage by 33% to 600 yuan, the local government said on its Web site.

Google Inc said some of its Web search tools like the “suggest” have been blocked in China even as the company awaits a decision from the government on whether it can continue its Internet services there.

Features like news, advertisements, Google e-mail service remain fully or mostly accessible, partially blocked sites are 10% to 66% inaccessible, according to Google.

Baidu Inc has benefited from the Google’s flap with China as more Internet users and Chinese advertisers are switching to the local search engine. Baidu’s stock has gained 66% this year making it the best performing stock on the Nasdaq 100 Index.

Visitors from China to Japan rose by 0.6% to 1 million last year, according to Japan National Tourism Organization.

Tourists from South Korea dropped 33% to 1.6 million and from Taiwan 26% to just over a million. Visitors from China spend an average $1,300 per trip compared to $280 per day by Americans and $340 by South Koreans according to the Japan National Tourism Organization.

As the population in Japan declines, electronics stores across Japan, especially in places like Akihabara, are welcoming Chinese tourists with seven-foot billboards and Mandarin-speaking assistants.

Shanghai Movers

Aluminum Corporation of China Limited fell 2.8% to 8.91 yuan today cut spot alumina prices from 2,850 yuan/ton to 2,650 yuan/ton, or 7.02%, marking the third time this year the company has adjusted spot prices, reports Securities Times.

Bank of China Limited closed unchanged at 3.39 yuan after the lender said on Wednesday that the maturity of a 160 billion yuan or $23 billion bond backed by the Chinese government would be extended by 10 years, according to Reuters report.

BEIH-Property Co fell 1.2% to 4.60 yuan.

Beijing Capital Development Co., Ltd rose 0.7% to 13.22 yuan after the company said it won an auction bidding 1.15 billion yuan for a residential and commercial development plot in Beijing.

China Gezhouba Group Company Limited fell 1.4% to 10.28 yuan after the company mainly engaged in the construction of infrastructure and hydropower projects, said that it won contracts worth a cumulative total of 35.56 billion yuan in the first half of the year, reports China Securities Journal, citing a company filing.

Jiangxi Ganyue Expressway Co., Ltd rose 0.1% to 5.70 yuan after the company said it received a subsidy of 137 million yuan from Jiangxi province.

Shanghai Tongji Science & Technology Industrial Co., Ltd rose 1.1% to 5.40 yuan after the company said first-half net income may rise more than 50% from a year earlier because of revenue gains for its design consulting and construction businesses, according to Bloomberg report.

Xinjiang Goldwind Science & Technology Co., Ltd rose 0.3% to 15.61 yuan after the maker of wind turbines was upgraded to “buy” from “neutral” by Goldman Sachs Group Inc.