China Stocks Gain; Japan Trails China

Chandrasekhar Atreya
16 Aug, 2010
New York City

Stocks in China gained the most in a week led by healthcare and banking companies while those in Hong Kong echoed mainland sentiments and gained modestly. China

[R]5:00 PM Hong Kong, China – Stocks in China gained the most in a week led by healthcare and banking companies while those in Hong Kong echoed mainland sentiments and gained modestly. China’s second quarter economic output surpasses that of Japan. Agricultural Bank of China completes the world’s largest public offering.[/R]

Shanghai’s key stock index rose in the morning session on news of China’s plan to boost economic development of south west region. The index ended up 2.1% on Monday, for its highest close in a week, with strong volume and heavy trading in healthcare and banks.

Stocks in Hong Kong fluctuated but closed higher on mainland sentiment.

The Hang Seng Index in Hong Kong gained 0.19% or 40.55 to close at 21,112.12. The CSI 300 Index in China gained 2.33% or 66.54 to close at 2,922.08 led by healthcare, energy and industrial companies.

After three decades of rapid growth, China has overtaken Japan to become the world’s second-largest economy only trailed by the United States, according to government figures released early Monday.

Japan’s economic output totaled $1.288 trillion in the second quarter, less than China’s $1.337 trillion, the Cabinet Office said in a statement in Tokyo today.

The Hong Kong economy grew 6.5% in the second quarter of 2010 from a year earlier, a rise for the fifth straight quarter, said John Tsang, Financial Secretary of the government of Hong Kong Special Administrative Region, yesterday.

The broad recovery mainly benefited from the robust growth on the mainland and other Asian economies, Tsang said while announcing Hong Kong’s economic data and latest GDP forecast.

As the island city’s GDP in the first half grew 7.2% year-on-year, the government revised the forecast for the whole year to between 5% and 6% from previous estimate of between 4% and 5%.

According to latest data released Friday Shanghai’s retail sales in the first half increased 17.5% from a year ago to 292.1 billion yuan.

Japan’s Pioneer Corp plans to expand its presence in China by tapping the country’s booming energy-efficient television business.

The maker of car-navigation and audio equipment signed an exclusive distribution deal with Suning Appliance Co to launch its liquid crystal display and light emitting diode TV’s in China for the first time, the company said yesterday.

Agricultural Bank of China Ltd boosted the size of its IPO past the previous record of Industrial and Commercial Bank of China Ltd’s $21.9 billion IPO in 2006, to $22.1 after selling more stock in Shanghai.

The bank sold a further 3.34 billion shares at the IPO price of 2.68 yuan a share, the lender said in a filing with the Shanghai Stock Exchange today, making it the largest IPO in the world.

Cnooc Ltd, China’s largest offshore oil producer, said it may post a record first half profit, more than double that of PetroChina Co and Royal Dutch Shell Plc, after selling more crude to meet diesel demand from factories and farmers.

Shanghai Movers

Shenhua Energy rose 5.4% to 23.93 yuan after it increased production by 2.8% from a year earlier in July.

China Coal Energy Co added 2.9% to 9.88 yuan after posting a 25% higher profit in the first half from a year earlier.

China Cosco surged 10% to 10.31 yuan, Cosco Shipping Co also gained the maximum 10% to 8.29 yuan and China Shipping Development Co gained 9% to 10.22 yuan.

Yunnan Baiyao Group Co, a manufacturer of traditional Chinese medicines, added 5.4% to close at 58.26 yuan.