China Stocks Drop; July Auto Sales Up 17%

Chandrasekhar Atreya
05 Aug, 2010
New York City

Stocks in China declined after regulators asked banks to conduct stress test for a 60% decline in property prices. Auto sales continued to rise in July, though at a slower pace than in previous months. Cathay Pacific

[R]5:00 PM Hong Kong, China – Stocks in China declined after regulators asked banks to conduct stress test for a 60% decline in property prices. Auto sales continued to rise in July, though at a slower pace than in previous months. Cathay Pacific’s profit surges. Two plots of land sold in north Shanghai.[/R]

China stocks declined on the weakness in banks after regulators asked lenders to conduct stress tests to gauge the effect of real-estate prices decline of 60%. However, stocks in Hong Kong after trading lower through the day gained towards the end to close marginally higher.

Hang Seng Index in Hong Kong gains 0.01% or 1.84 to close at 21,551.72. CSI 300 Index in China fell 0.89% or 25.60 to close at 2,850.83 led by a drop of 1.8% in a gauge of bankers and developers.

China will maintain its battle against speculative “hot money” in the second half of the year after disclosing 197 irregularities in the first half, the top currency regulator said on Wednesday.

China checked 3.47 million cross-border transactions in the first half of the year, involving $440 billion and only 197 cases were reported as irregular, said the State Administration of Foreign Exchange. Of these 197 cases, 42 were settled and the others are still processed, the regulator said.

China’s annual production and sales of new autos will surpass 15 million units this year, according to Dong Yang, Secretary General of the China Association of Automobile Manufacturers.

Auto sales continued to rise in July, though at a slower pace than in previous months. Growth slowed from 124% in January to 40% in April and to 17.18% in July.

Sino-Ocean Land Holdings Ltd, a real estate developer listed in Hong Kong, yesterday bought two land parcels in north Shanghai’s Baoshan District for 1.9 billion yuan through two of its subsidiaries.

The plots are zoned for homes and are in the central areas of Luodian New Town. The parcels covering an area of 43,300 square meters and 107,824 square meters were sold at a gross floor area price of 20,100 yuan per square meter and 21,300 yuan per square meter respectively.

Anhui Jianghuai Automobile Co yesterday announced plans to form a 50-50 venture for developing new energy vehicles. The light commercial vehicle producer said it has signed a deal with an affiliate of the hybrid Kinetic Motors Corp in Tianjin.

The two companies pledged to develop alternative fuel vehicles with an initial investment exceeding 2 billion yuan.

China Everbright Bank IPO is garnishing strong demand from investors leading to a huge oversubscription for its $2.9 billion offer.

Thirty key investors have committed up to 60 billion yuan for their portion of the 6.1 billion share offering, or roughly $1.37 billion of the IPO, the bank said yesterday.

Cathay Pacific Airways Ltd, the Hong Kong-based carrier, said its first half profit surged to HK$6.84 billion as passenger numbers improved from the recession. The carrier also announced that it would buy 30 Airbus jets.

Hong Kong-based Swire Pacific Ltd said its first half profit more than doubled on higher rental income and earnings from Cathay Pacific Airways Ltd. Profits excluding reevaluations was HK$8.91 billion or HK$5.92 a share compared to HK$3.8 billion or HK$2.52 a share a year earlier, Swire said in its statement to the stock exchange today.

Shanghai Movers

ICBC, the nation’s biggest lender, fell 1.4% to 4.23 yuan and China Construction Bank Corp, the second largest lender, dropped 1.6% to 4.83 yuan.

Bank of China Ltd fell 1.7% to 3.49 yuan.

Poly Real Estate, China’s second-largest developer by market value, lost 4.5% to 12.50 yuan, China Vanke Co, the largest lender, fell 3% to 7.99 yuan and Gemdale Corp also fell by 2.8% to 6.89 yuan.

Kweichow Moutai gained 2.9% to 148.16 yuan.

Chongqing Department Store Cogained 4.2% to close at 46.94 yuan.