Shanghai Stocks in Five-month Rally

Chandrasekhar Atreya
12 Oct, 2010
New York City

Stocks in Shanghai continued their rally to reach a five-month high aided by commodity stocks. Banks closed lower after China temporarily increases the reserve ratio of some large banks to curb liquidity. China Vanke sales nine-month sales soared more than 50%.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai continued their rally to reach a five-month high aided by commodity stocks. Banks closed lower after China temporarily increases the reserve ratio of some large banks to curb liquidity. China Vanke sales nine-month sales soared more than 50%.[/R]

Stocks in Shanghai closed higher and left intact five-month old rally but indexes in Hong Kong closed lower. Resource stocks traded higher but banks declined after China lifted capital reserve ratio.

The CSI 300 Index in Shanghai gained 1.27% or 39.83 to close at 3,172.73 and in Hong Kong Hang Seng index dropped 0.37% or 85.61 to close at 23,121.70.

China’s four largest banks issued more than 200 billion yuan of new loans in September, indicating the total for the overall banking sector likely exceeded regulators’ expectations last month, the China Securities Journal reported Tuesday.

The robust lending prompted the central bank to raise the deposit reserve ratio by 50 basis points for the big four banks, Industrial & Commercial Bank of China Ltd, China Construction Bank Corp, Bank of China Ltd and Agricultural Bank of China Ltd.

China welcomed the final ruling by the U.S. Court of International Trade directing the U.S. Department of Commerce to scarp import duties on Chinese tires.

Sihuan Pharmaceuticals Holdings Group Ltd, China’s largest cardio-cerebral vascular drug maker, seeks to raise up to $741 million through its Hong Kong IPO, according to the term sheet of the company.

Sihuan will sell 1.25 billion new shares, or 25% of its enlarged share capital, at HK$3.88 to HK$4.60 per share, according to the term sheet.

China Vanke Co said Monday property sales in the first three quarters of this year jumped more than 50% to 71.42 billion yuan and ahead of 2009 sales.

The largest listed developer sold a total of 6.01 million square meters of new homes during the nine month period, an increase of 17% from the same period a year ago, according to a regulatory filing with the Shenzhen Stock Exchange.

Chongqing Changan Automobile Co said Monday it will invest 11.5 billion yuan in a passenger vehicle project in Beijing.

The manufacturing plant, which covers 3.3 square kilometers, will be able to produce 500,000 vehicles and 500,000 engines annually with an output values at 50 billion yuan.

China’s copper products output is expected to reach 10 million tons this year, or about half of the world’s total, an industry official said Monday as he called for a technology upgrade and make the industry globally competitive.

The country produced 8.9 million tons of copper products, such as pipes and tubes, last year, up by 6.2% from 8.4 million tons in 2008. The output should touch 10 million tons this year, said Wang Biwen, Head of the copper division under the China Nonferrous Metals Fabrication Industry Association.

Patni Computer Systems, a Mumbai-based global provider of information technology services and business solutions, established its first center in China, in Suzhou City in eastern Jaingsu Province.

Located in the Suzhou Software and Technology Park, the new center will create 500 jobs.

Global initial public offering picked up in the third quarter, boosted by strong Chinese listings, an industry report said Monday.

China issues made up 76% of global offerings and raised $40.1 billion in 110 deals, Ernst & Young said in a report Monday. The capital raised surged 147% from the second quarter.