Hong Kong Index Surges 1.7%; Economy Expands 7.2%

Chandrasekhar Atreya
14 Oct, 2010
New York City

Hong Kong index soared 1.7% tracking gains in international markets. Shanghai introduces new curbs for property loans. Business Confidence Index and Business Climate Index rose in September. Hong Kong economy in the first expanded at 7.2%.

[R]5:00 PM Hong Kong, China – Hong Kong index soared 1.7% tracking gains in international markets. Shanghai introduces new curbs for property loans. Business Confidence Index and Business Climate Index rose in September. Hong Kong economy in the first expanded at 7.2%.[/R]

Stocks in China fluctuated but finished only marginally higher but the benchmark index in Hong Kong surged 1.7% on a rally in global markets.

The Hang Seng Index in Hong Kong gained 1.71% or 394.47 to close at 23,852.90. The CSI 300 Index in China was marginally higher at 0.2% or 6.56 points to close at 3,224.14.

The Shanghai government temporarily stopped the city’s public housing fund from making loans to home buyers, in an effort to cool the city’s housing market bubble.

The Shanghai Provident Fund Management Center said the fund will no longer give loans to second-home buyers if the floor area of their first home divided by the number of family members is larger than the local average of 34 square meters per family member. And, loans are then capped at 400,000 yuan.

Entrepreneurs expressed greater confidence in China’s economy in the third quarter of this year, while an index measuring the business climate also improved according to two surveys by the National Bureau of statistics showed Wednesday.

The Business Confidence Index in the country gained 2.9 points in the September quarter from the previous quarter to 135.9, and the Business Climate Index rose 2 points to 137.9 in the same period.

Securities regulator in China will implement new rules from next month to improve the pricing mechanism of initial public offerings.

Under the new rules effective November 1, more institutional investors will be allowed to participate in the book-building process to work out a price range of new stocks, according to the China Securities Regulatory Commission.

New bank lending is expected to exceed the target set for this year as new yuan loans grew faster than expected in September, while the country’s foreign exchange reserves hit a record $2.65 trillion, central bank data showed Wednesday.

Banks in China extended 595.5 billion yuan of new loans in September, up from August’s 545.2 billion yuan, the People’s Bank of China said on its Web site Wednesday.

Shanghai City has ambitions to join Singapore and Hong Kong as one of Asia’s top three cruise centers, city tourism officials said.

Under a five-year development program drafted by the Shanghai Municipal Tourism Administration, local shipyards will be upgraded to manufacture luxury cruise liners by 2015, said Shen Shanzhou, Vice Chairman of the administration.

Hong Kong’s Chief Executive said Wednesday that the economy of the island nation is expected to grow 5% to 6% this year as it completes its recovery from the global financial crisis.

Donald Tsang said in his annual policy speech that the city’s economy expanded by 7.2% in the first half, lifted by exports and local demand, and that the latest unemployment rate is 4.2%, the lowest since January 2009.

China rail ministry will issue 20 billion yuan in 10-year and 15-year notes, totaling the non-sovereign sales of notes to 312 billion yuan this year, up from 307 billion yuan in the same period of 2009.

The additional funds will allow China to lay high speed tracks twice long than installed in the rest of the world.