China Region Stocks Tumble; Steel Output Drops

Chandrasekhar Atreya
12 Aug, 2010
New York City

Stocks in China region tumbled for the second day on global outlook. Consumer confidence rises in the second quarter with the rural areas benefitting from a rise in government spending. Hong Kong Exchanges and Clearing Ltd reported 3% increase in first half.

[R]5:00 PM Hong Kong, China – Stocks in China region tumbled for the second day on global outlook. Consumer confidence rises in the second quarter with the rural areas benefitting from a rise in government spending. Hong Kong Exchanges and Clearing Ltd reported 3% increase in first half.[/R]

Stocks in China region continue to slide as investors focus on economic slowdown at home and protracted recovery in the U.S. Exports to the U.S. are the main drivers of China’s economic growth.

Broader indexes linked to mainland stocks are down at least 22% and Hong Kong index has fallen more than 5% in the year so far.

The Hang Seng Index in Hong Kong lost 0.89% or 188.83 to close at 21,105.71. The CSI 300 Index in China lost 1.19% or 33.82 to close at 2,816.39.

A survey of 3,500 people showed consumer confidence in China rose in the second quarter with more confidence increase in rural areas as government measures boosted investment and farmer’s incomes.

The measure increased from 108 in the previous quarter to 109 in the quarter ending June 30, according to a statement by Nielsen Co and the Chinese statistic bureau’s Economic Monitoring and Analysis Center in Beijing today.

The yuan’s central parity rate was set at 6.8015 per dollar Tuesday, up 0.0247 yuan from the previous day, the People’s Bank of China said Tuesday morning. On Wednesday at 5:30 p.m. Beijing time, the yuan’s interbank rate fetched 6.7736 yuan to a dollar.

Alibaba.com Ltd, the Chinese e-commerce operator, is looking to buy more companies in the U.S. to expand overseas business, CEO David Wei said Wednesday.

Tencent Holdings Ltd, China’s biggest internet company by market value, said its second quarter profit rose 61%, after adding social networking users and more sales via advertising. Net income rose to 1.92 billion yuan from 1.19 billion yuan in the prior year, Tencent said in its regulatory filing to Hong Kong Stock Exchange Wednesday.

Crude steel production in China fell to a five-month low as companies shut down plants for maintenance on weaker demand. Output was 51.7 million tons in July, 3.9% lower than June and 2.2% when compared to year ago figures, according to data from the National Bureau of Statistics Wednesday.

Foreign Banks may be allowed to underwrite a wider range of debt on China’s interbank bond market according to the nation’s banking regulator.

China Citic Bank Corp, the banking unit of the country’s largest investment firm, said it plans to raise as much as 26 billion yuan in a right offer according to a regulatory filing.

The bank said it will offer 2.2 shares for every 10 held, for a total of 8.59 billion shares in Shanghai and Hong Kong.

Hong Kong Exchanges & Clearing Ltd, the operator of Asia’s third-biggest stock exchange, is considering extending its hours of trading to align it with mainland China markets, according to the CEO Charles Li.

The stock exchange is proposing that trading begin at 9.30 in the morning with one hour break for lunch at noon and close at 4.00 p.m., Li told reporters after announcing that the first half results.

Hong Kong Exchanges & Clearing Ltd, operator of Asia’s third-biggest stock market, said first half net rose by 3% as new listings went up, countering the slowing market turnover.Net income for the first half ended June 30 advanced to HK$2.26 billion from HK$2.19 billion in the prior year, according to the company’s statement Wednesday.

Shanghai Movers

Jiangxi Copper lost 2.5% to 27.74 yuan and Aluminum Corp of China Ltd fell 2.6% to 10.14 yuan.

Industrial & Commercial Bank of China Ltd, the nation’s largest listed lender, fell 1.7% to 4.12 yuan.

China Merchants Property Development Co gained 3.1% to 19.42 yuan.

Foshan Plastics Group Co slumped 4.8% to 12.23 yuan and Kweichow Moutai Co added 0.7% to 29.78 yuan after reporting 11% rise in first half profit.