Shanghai Stocks Drop to 5-week Low

Chandrasekhar Atreya
20 Sep, 2010
New York City

Shanghai stocks declined and dragged the index fell to five-week low. Stocks in Hong Kong searched for direction and closed unchanged. Net profit of centrally-administered government controlled companies grew at a slower pace in August.

[R]5:00 PM Hong Kong, China – Shanghai stocks declined and dragged the index fell to five-week low. Stocks in Hong Kong searched for direction and closed unchanged. Net profit of centrally-administered government controlled companies grew at a slower pace in August.[/R]

Stocks Shanghai declined and dragged the benchmark index to its five-week low on concern the government curbs on property bubble may spur further economic slowdown. The stocks in Hong Kong fluctuated to finish little changed.

The Hang Seng Index in Hong Kong lost 0.03% or 6.48 to close at 21,977.34. The CSI 300 Index in China lost 0.4% or 11.54 to close at 2,849.83.

Most Chinese property buyers think that prices are still too high despite the government measures to cool the property bubble, a central bank survey showed yesterday.

Among households in China, 72.2% thought property prices were too expensive, up 7% from a year ago, according to a third quarter survey across 50 cities done and posted on the Web site of the People’s Bank of China.

China is expected to develop its coal conversion industry into the world’s largest by 2020 as the country is seeking the use of clean use of its coal resources, according to a research finding.

“China’s capacity of coal liquefaction projects would hit the equivalent of 20 million tons of oil, that of coal to gas would reach 50 billion cubic meters, and coal to chemical 10 million tons of oil equivalent,” Du Minghua, Deputy Director of China Shenhua CTL & CTC Research Institute said at an energy forum over the weekend in the capital of Shanxi Province, Taiyuan.

China’s bankers have expressed the most confidence in the macro economy and the banking industry in four years as they forecast cooler economic growth and an unchanged monetary policy in the rest of 2010, according to a survey by the central bank released Sunday.

The banker’s confidence index hit 73.1% in the third quarter, up 9.1% from the previous quarter, the highest since the second quarter of 2006, according to the survey results posted on the People’s Bank of China Web site.

The PBoC said Friday that financial stability is essential to economic growth and that big swings in the U.S. dollar would hinder global recovery.

It was China’s response growing external pressure on the yuan to rise and came just a day after China’s Foreign Ministry rebutted U.S. Treasury Secretary Timothy Geithner’s criticism on its currency policy with a warning that additional pressure would only exacerbate the scenario.

Companies from mainland China were involved in 46 mergers in August, an increase of 27.8% from a month earlier, according to an industry report.

Six of these mergers, involving overseas firms accounted for 86% of the total, totaled $3.25 billion, Zero2IPO Research Center said in its report Friday.

Third-tier cities, which accounted for 56.3% of China’s GDP in 2009, are set to drive the future growth of the economy because of their surge in consumer spending, lower costs, and big market potential, according to participants at a forum on Friday.

As a result investors may also shift their attention to these cities where numerous private companies have thrived, they said at the Forbes China County Investment & Development Forum.

China became the world’s fourth most popular destination for cross border commercial real estate investment in the first half of the year, from its sixth position last year, according to a latest industry finding.

Cross-border investment totaled $4.3 billion in the first half of 2010, compared with $580 million in 2009, international real estate service provider Jones Lang LaSalle said in a report released Friday.

Net profit of China’s state-owned enterprises administered by the centre grew at a slower pace in August, reflecting a slowing down of the country’s economic growth.

The state-owned companies together earned 723.55 billion yuan, in the first eight months of the year, up 50% from a year earlier, compared with 54.3% in the first seven months, the State-owned Assets Supervision and Administration Commission said Friday.

Mongolian Mining Corp and Winsway Coking Coal Holdings Ltd are seeking to raise as much as HK$9.74 billion in initial public offerings in Hong Kong to fund expansion plans to meet Chinese coal demand.

Mongolian Mining Corp and its shareholders plan to raise as much as HK$5.28 billion and Winsway along with Hopu Investment Management Co as an investor, is seeking to raise as much as HK$4.46 billion, according to prospectus details sent to investors. The two firms supply steel making coal to China from Mongolia.