Shanghai Declines; Home Sales Fall

Chandrasekhar Atreya
03 Aug, 2010
New York City

Stocks in China fell on a weakness in banks while in Hong Kong edged higher. Shanghai new home sales slowed in July. Geely Holdings completes $1.5 billion acquisition of Volvo. A new Foxconn facility starts production of iPhones in Henan Province.

[R]5:00 PM Hong Kong, China – Stocks in China fell on a weakness in banks while in Hong Kong edged higher. Shanghai new home sales slowed in July. Geely Holdings completes $1.5 billion acquisition of Volvo. A new Foxconn facility starts production of iPhones in Henan Province.[/R]

Stocks in Hong Kong gained marginally after starting on a bright note and losing momentum through the day on mainland concerns. China stocks traded lower during the day pushing the benchmark index to its biggest loss in two weeks.

The Hang Seng Index in Hong Kong gained 0.21% or 44.87 to close at 21,457.66. The CSI 300 Index in China lost 1.76% or 51.30 to close at 2,865.97.

New home sales remained sluggish in Shanghai for the third continuous month as a result of government rein-in policies.

Sales on new homes, excluding those designated for families dislodged by urban redevelopment projects, climbed 2.4% to 430,000 square meters in July, Shanghai Uwin Real Estate Information Services Co said on Monday. That compares with 1.86 million square meters sold in July 2009.

A new Foxconn Technology Group factory in central China’s Henan Province began production yesterday.

The $100 million factory is owned by Futaihua Precision Electronics (Zhengzhou) Co Ltd, a Foxconn subsidiary, and will primarily produce Apple’s iPhone according to an agreement between Foxconn and the government of Zhengzhou, Henan’s capital.

Media Development Authority of Singapore yesterday inked a deal with a Shanghai-based venture capital firm to establish a 480 million yuan cross border fund to boost digital media in the two countries.

The dual-currency fund, with 50% in Singapore dollars and 50% in yuan, will be managed in Singapore by Gobi Partners, aiming to help Singaporean startups entering the Chinese market and domestic companies seeking international exposure.

Shanghai’s top media operator won licenses to begin new services before the city issues its three network convergence plan, Shanghai Daily said yesterday.

China’s government announced last month a pilot plan to integrate the three systems to bring together TV, mobile phone and internet networks, in Shanghai and 11 other cities and regions. All chosen regions should announce detailed plans before August 16, according to the Ministry of Industry and Information Technology.

Geely Holding Group said yesterday it completed its purchase of Volvo Car Group from Ford Motor Co, sealing the biggest overseas acquisition in China’s car industry.

The final deal is valued at around $1.5 billion, including $1.3 billion paid in cash, which is lower than an earlier price of $1.8 billion when the agreement was signed in March. A handover ceremony was held yesterday after the deal won approval from regulators in China, the United States and the European Union.

Worst floods in China in more than a decade may cut production of rice, cotton and other items boosting prices and hampering the efforts of the government to keep inflation under 3%. Floods and landslides have knocked down almost 450,000 homes, destroyed more than 400,000 hectares of farmland and caused 52.7 billion yuan of losses in July, the Ministry of Civil Affairs said July 27.

Contract handset maker Foxconn international Holdings Ltd, said Monday it resumed operations at a facility in India following a production halt last month after some workers experienced giddiness and nausea.

Foxconn, which makes handsets for companies like Nokia and Motorola Inc, suspended operations at the handset mechanical parts production facility in Kancheepuram District in Tamil Nadu on July 23. The Hong Kong listed shares of Foxconn jumped 8.8% on Monday because of media reports the Indian plant had resumed production.

Shanghai Movers

Sanan Optoelectronics Co, a producer of light-emitting diode chips, gained 8.9% to 49.9 yuan after announcing a $30 million investment in a Chinese venture with Albuquerque-based Emcore Corp.

Zhengzhou Coal Mining Machinery Group Co rose 57% from its IPO price of 31.44 yuan on its first day of trading in Shanghai.

Industrial & Commercial Bank, China’s largest lender, dropped 1.8% to 4.29 yuan, Agricultural Bank of China fell 2.1% to 2.74 yuan and Bank of China Ltd slipped 1.9% to 3.55 yuan.

Poly Real Estate fell for the first time in five days by 1.3% to 13.31 yuan.