Shanghai Rallies; New Home Sales Rebound

Chandrasekhar Atreya
07 Sep, 2010
New York City

Stocks in China rallied led by steel makers after the government ordered the closure of energy inefficient mills. Home buying momentum rebounds after effects of property curbs wear off. China is set to become the world

[R]5:00 PM Hong Kong, China – Stocks in China rallied led by steel makers after the government ordered the closure of energy inefficient mills. Home buying momentum rebounds after effects of property curbs wear off. China is set to become the world’s largest LCD market.[/R]

China stocks rose pushing the benchmark index to its highest in almost four months led by steelmakers after inefficient steel mills were asked to close down to save on energy. The market’s gains were however limited as banks fell on news that regulators plan to impose loan-loss reserves on lenders.

Hang Seng Index in Hong Kong gained 0.22% or 46.02 to close at 21,401.79. The CSI 300 Index in China gained 0.27% or 8.02 to close at 2,983.11.

In a move to meet this year’s energy saving targets, Hebei, China’s largest steel producing region, and other provinces are shutting down inefficient steel mills by cutting their power supply.

The campaign that started late August has already caused steel prices to rise and could lead shortage in supplies and also lower the prices of raw materials. Eighteen steel mills in Wu’an, Hebei, have been ordered to close down last Sunday, the China Securities Journal said.

Momentum of home buying continued to rebound in Shanghai last week amid diminishing effects of the tightening policies of the government.

Sales of new homes, excluding those designated for relocated residents under urban development plans, surged 39% from a week earlier, to 242,000 square meters, to reach the highest weekly volume registered since mid-April when the government announced a series of tightening moves to curb housing speculation, Shanghai Uwin Real Estate Information Services Co said Monday.

Electronic exports from China surged an annual 37.3% in the first seven months of the year due to booming shipments of electronic components, the Ministry of Industry and Information Technology said Monday.

From January to July, the value of China’s electronic exports was $313.5 billion, 36.9% of the national total export value. PC exports surged 55.7% from the same period a year ago to $50.8 billion.

China will scrap rules that limit cross-regional mergers and acquisitions to promote consolidation and accelerate restructuring, the Cabinet said Monday.

Any rules that are not conducive to M&A and could impede fair play, especially those designed by regional governments to prevent outside companies acquiring local firms, should be removed, the Cabinet said.

Abu Dhabi Investment Authority, the world’s largest sovereign wealth fund, named Ted Chu, a Chinese American, as its Chief Economist, the company said Monday.

Star Capital, a real estate private equity fund formed by major Chinese private enterprises, was launched Monday in Shanghai with an initial capital of 5 billion yuan. The fund, whose largest investor is Fosun Group, aims to build between 20 and 25 integrated landmark real estate projects in both first and second tier cities nationwide within five years.

After being grounded for five days following a landing trouble on August 28, China Express Air resumed half of its scheduled flights Monday, said airline executives.

Flights within Guizhou Province and some from Chongqing resumed yesterday, accounting for half of the Guiyang-based airline’s flights, said Chen Huaiyu, deputy general manager of the company.

Sales of LCD televisions in mainland China will hit 50 million units next year, the largest in the world. Industry watchers expect 3D TV sales to take off domestically, said Taiwan-based AU Optronics.

The world’s third-biggest LCD panel maker launched 65-inch 3D TV Screens in the domestic market and it expects sales to hit 2 million units on mainland China, according to Paul Peng, Executive Vice President of the company.

Insurance regulator in China has for the first time made clear its stance on insurers investing in the growing private equity market in the country.

Chinese insurers can now invest up to 5% of their assets in private equity and 10% in real estate, the China Insurance Regulatory Commission said on its Web site Monday.

Melbourne-based Telstra Corp said it remains committed to investing in China after making a move to sell its stakes in property Web site SouFun Holdings Ltd, Chief Executive David Thodey said Tuesday.

Growth of industrial output in China slowed to the smallest increase in July in 11 months, a government forecast showed today. Production is expected to gain 10% in the second half of 2010, from a year earlier, the Ministry of Industry and Information Technology said in Beijing today.

That compares with July’s 13.4% and 17.6% average for the first half of the year. August data is due next week.

Magic Holdings International Ltd, a Chinese maker of facial masks, is seeking HK$660 million in a Hong Kong initial public offering, according to the prospectus of the company.

The company is offering 200 million new shares at HK$2.40 to HK$3.30 apiece, the terms say. BOC International is managing the transaction.