China Surplus Expands; Home Price Rise Slows

Chandrasekhar Atreya
10 Sep, 2010
New York City

Stocks in China region traded higher after August trade surplus increased 25%. Shanghai Pharmaceutical Holding Co plans to list in Hong Kong to raise as much as $1 billion. Metropolitan homes prices rose at a slower pace. Iron ore imports in August dropped 13%.

[R]5:00 PM Hong Kong, China – Stocks in China region traded higher after August trade surplus increased 25%. Shanghai Pharmaceutical Holding Co plans to list in Hong Kong to raise as much as $1 billion. Metropolitan homes prices rose at a slower pace. Iron ore imports in August dropped 13%.[/R]

Stocks in China gained modestly after August trade surplus surged 25% to $20 billion for mainland China. Better than expected jobs and trade data also boosted confidence in trading in Shanghai and in Hong Kong.

The CSI 300 Index in China added 0.21% or 6.09 to close at 2,932.55. The Hang Seng Index in Hong Kong gained 0.43% or 90.12 to close at 21,257.39.

China’s trade surplus in August was more than $20 billion, even after imports surged substantially. Exports rose 34.4% in August and imports climbed more-than-forecast 35.2%, leaving a surplus of $20.03 billion, a customs bureau report showed Friday.

Trade surplus increased 25% from $15.7 billion in the month a year ago.

Shanghai Pharmaceutical Holding Co said its board approved an 8 billion yuan Hong Kong market listing to replenish capital and pursue acquisitions.

The company will issue about 667 million new H shares for at least 17.6 yuan a share, representing no more than 25% of the total stake of the listing, according to a statement filed with Shanghai Stock Exchange Wednesday.

The gap between the poor and the rich is increasing in China and is on the verge of becoming as severe problem even as wages have risen in rural areas, officials told an Expo forum in Shaoxing, Zhejiang Province.

In the first half of this year the average income of rural Chinese jumped 9.5% from last year. The average peasant’s income increased from 2,622 yuan in 2003 to 5,133 yuan last year, according to Zhang Xiaoqiang, Vice Chairman of the National Development & Reform Commission.

Grand China Logistics signed Thursday a framework agreement with Tangshan Iron & Steel Group Co for the purchase and transport of steel. According to the agreement the logistic company will buy marine steel products from Tangshan, as well as offer its partner road transport and dock services.

PetroChina started an oil refinery with an annual capacity of 10 million tons in Southern China’s Guangxi Province to supply high quality fuel to southwestern areas. Just a few days ago PetroChina got the government approval double the capacity of its Huabei oil refinery for higher quality products as China steps up its efforts to upgrade fuel standards to cut emissions.

The market regulator Friday approved Bank of China’s proposal for a rights offer in Shanghai and Hong Kong to replenish capital.

The Beijing-based bank received approval from its shareholders in August to raise up to 60 billion yuan in a rights offer. The bank recently finished its convertible bond sale of 40 billion yuan earlier in the year.

Property prices in China grew at a slower pace in the eight month period till August from a year earlier as the government cracked down on speculation and multiple home purchases.

Prices in 70 major cities climbed at 9.3%, the Statistics Bureau’s newspaper China Information News reported Friday. This was slower than the 10.3 increase in the period till July.

Iron ore imports by China, the largest buyer of the steel ingredient, dropped 13% in August to register the biggest decline in seven months as steel production slowed and India reduced exports.

Imports fell to 44.6 million tons from 51.3 million tons in July, according to data provided by China’s General Administration of Customs.