China Stocks Rally; Foreign Reserves Breakdown

Chandrasekhar Atreya
06 Sep, 2010
New York City

Stocks in China region rallied more than 1.8% tracking gains in the U.S. indexes after the release of jobs data. China released its foreign reserve holdings with 65% held in the U.S. dollar and 26% in the euro. PetroChina gets approval for doubling its refining capacity.

[R]5:00 PM Hong Kong, China – Stocks in China region rallied more than 1.8% tracking gains in the U.S. indexes after the release of jobs data. China released its foreign reserve holdings with 65% held in the U.S. dollar and 26% in the euro. PetroChina gets approval for doubling its refining capacity.[/R]

Shanghai’s key stock index rallied Monday morning after positive U.S. job data eased economic worries. The key stock index closed at a four-month high led by steel stocks that outperformed after official media said some steel mills were ordered to close down.

Stocks in Hong Kong also rose on U.S. job data, with the benchmark index posting its highest close in almost a month.

The Hang Seng Index in Hong Kong gained 1.83% or 384.27 to close at 21,355.77, its highest close since August 10. The CSI 300 Index in China gained 1.88% or 54.89 to close at 2,975.09, very near the 3,000 mark threshold.

China disclosed for the first time its mix of foreign exchange reserves, after holding it as a secret for a very long time. The reserves are 65% in dollars, 26% in euros, 5% in pounds and 3% in yen.

The foreign exchange heft of China is already the world’s largest at $2.45 trillion, accumulated through trade and foreign direct investments. The breakdown was reported Friday by China Securities Journal citing reserve managers it did not name.

Chinese investors have approached at least one big Canadian pension fund about a possible joint bid for Canada’s Potash Corp to rival BHP Billiton’s $39 billion hostile offer.

The disclosure by Alberta Investment Management Corp is one of the first piece of hard evidence to back up speculation that China is looking for ways to derail a takeover of Potash Corp by the Anglo-Australian miner. However AIMCO said it was not interested because the economies of scale did not work.

PetroChina Co won governmental approval to double the capacity of its Huabei oil refinery to supply high-quality fuels to northern regions of the country.

The expansion will make PetroChina the 14th such refinery in China with a capacity of 10 million tons per annum or more, said its parent China National Petroleum Corp in a statement Friday.

China will not publish quarter-to-quarter gross domestic product data until 2011, a year later than scheduled, the National Bureau of Statistics said Friday.

Innovations in Chinese enterprises are increasing steadily with more patents filed and more funds invested in research and development, the China Enterprise Confederation said Saturday.

The top 500 Chinese companies possessed 169,000 patents in 2010, up 13.3% from last year, according to a report released by the CEC.

The top 500 Chinese companies raked up 27.6 trillion yuan in revenue in 2009, or 82% of China’s GDP, according to a report by the China Enterprise Confederation and China Enterprise Directors Association.

The report issued Saturday at a forum in Hefei, capital of Anhui Province, said the enterprises outperformed their worldwide competitors in profitability amid the nation’s rapid economic recovery.

Shanghai’s output of new energy cars will reach 30 billion yuan by 2012, authorities said Sunday.

It will also build 25,000 charging stations for battery or hybrid vehicles by 2012, said Wang Zhe, of Shanghai’s new energy automobile promotion office at the International Forum on Chinese Automobile Industry Development.

China Vanke Co reported Friday its August sales more than doubled from a year earlier to 11.99 billion yuan, a monthly record for Chinese property developers. Vanke’s August revenue rose by 42% from July, said the developer in a filing to the Shenzhen Stock Exchange.

China’s car market will continue to grow this year but may not sustain the breakneck speed of last year, the CEO of Ford Motor’s China car venture said Saturday.

“Overall this year versus last year, there will be growth. First quarter and second quarter were good but we see some slowdown in the third quarter,” Jeffrey Shen told Reuters on the sidelines of an industry event in the northern municipality of Tianjin.

China said Monday it is investigating the qualifications of the nation’s commercial pilots after revelations that more than 200 of them had falsified their resumes. The probe comes after the crash that killed 42 people on August 24. The crew and 54 passengers survived the crash, in which the plane missed the runway, sparking speculation that pilot error was to blame.

Shanghai Movers

Baoshan Steel, the listed unit of China’s second-biggest steelmaker, jumped 7.1% to 6.98 yuan. Hebei Iron & Steel, the listed unit of China’s biggest steelmaker, climbed 6.9% to 4.19 yuan.

China Petroleum rallied 2.9% to 8.55 yuan and China Coal Energy Co advanced 3.2% to 10.08 yuan.

Hong Kong Movers

Foxconn International Holdings Ltd, the world’s biggest contract maker of mobile phones, gained 2.2%.

Among real estate companies, Henderson Land Development jumped the most gaining 3.5%.

Belle International Holdings surged 6.5% as the retailer of women’s shoes officially joined the benchmark Hang Seng Index today.