Shanghai Stocks Lag; HK Index Surges

Chandrasekhar Atreya
17 Sep, 2010
New York City

Stocks in Shanghai treaded marginally lower but the weekly drop was the steepest in more than two months. Hong Kong index gained 1% and for the week added 3.3% and surged more than 7% in the month. Four Taiwan-based banks get permission to open mainland branches.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai treaded marginally lower but the weekly drop was the steepest in more than two months. Hong Kong index gained 1% and for the week added 3.3% and surged more than 7% in the month. Four Taiwan-based banks get permission to open mainland branches.[/R]

Stocks in China fluctuated to close marginally lower, pushing the benchmark index to its steepest drop in more than two months. Stocks in Hong Kong however, rallied to gain more than 1%.

Hang Seng Index in Hong Kong rallied 1.29% or 279.41 to close at 21,970.86 and for the week added 3.3% and surged more than 7% in the month.

The CSI 300 Index in China gained 0.13% or 3.58 to close at 2,861.37. The Shanghai Composite Index fell 0.2% or 3.78 to close at 2,598.69 and declined 2.4% in the week, the most in two months. For the month, indexes are nearly flat.

The average return of funds managed by overseas institutions trading in yuan-denominated shares rose 2.15% in August compared with 1.21% rise in the Shanghai Composite Index, according to an industry report.

The performance was in stark contrast to a 4.4% growth posted by domestic peers, said the report by research firm Lipper & Co.

Gemdale Corp, one of China’s largest developers by market value, announced Thursday in Shanghai that it will increase its share of high-end housing market and raise its investment in commercial real estate projects over the next five years to accelerate growth in the Yangtze River Delta region.

Under the plan, high-end residential development will eventually account for 30% of its total portfolio. In the meanwhile the company will seek opportunities in neighboring Jaingsu and Zhejiang provinces to build integrated commercial projects.

Facing a hostile congressional questioning, U.S. Treasury Secretary Timothy Geithner took the middle path by pressing China to significantly boost the value of its currency while fending off lawmakers who pressed for punitive measures which he felt could be counterproductive.

China rejected the criticism by Geithner and warned that continued pressure might worsen the situation.

“The appreciation of the renminbi can’t solve the trade deficit with China. Pressure cannot solve the issue. Rather, it may lead to the contrary,” said Foreign Ministry spokeswoman Jiang Yu.

China’s first inland nuclear power plant is now scheduled to be commissioned by 2015 in Hubei Province in Central China, local authorities said Thursday.

The project site in Xianning City has been cleared with construction scheduled to begin in 2011. China Guangdong Nuclear Power Group and Hubei Provincial government agreed in 2008 to jointly build the plant with a generating capacity of 4 million kilowatts.

China will soon unveil a detailed plan to develop 200 industry funds totaling 100 billion yuan to support seven new strategic industries and encourage capital investment in those areas, a government official said Thursday.

“The National Reform and Development Commission is working on the draft plan and this will allow both Chinese and foreign capital to invest in these key areas,” said Zhang Yingxin, Deputy Director General of the Committee of Investment Promotion Agency at the Ministry of Commerce.

The China Banking Regulatory Commission said Thursday it gave approval for four Taiwan-based banks to set up branches on the mainland. The four banks are Land Bank of Taiwan, First Commercial Bank, Taiwan Cooperative Bank and Chang Hwa Bank.

China will allow more regions and companies in those regions to settle cross-border trade in yuan and boost offshore use of the currency, the central bank said Friday.

The government will push for further opening of its financial markets to increase channels for overseas investors to obtain the use of the Chinese currency, the People’s Bank of China said in a report.

Dell Inc plans to spend more than $100 billion in China over the next decade, including local procurement and a new manufacturing plant in Chengdu.

Dell, the world’s second largest PC maker, plans to develop a manufacturing and customer support center in the west Chengdu High-Tech Park. The new center is likely to be operational by 2011.

China needs to spend at least 2% of its GDP a year, at 680 billion yuan to clean up 30 years of industrial waste, said He Ping, Chairman of Washington-based International Fund for China’s Environment.