Banks in China Report Higher Earnings

Chandrasekhar Atreya
28 Oct, 2010
New York City

Stocks in Shanghai remained little changed after banks reported sharply higher prices. Bank of China earnings rose 29% and AgBank earnings gained 30%. Most airlines passed on recently revised higher fuel prices to consumers. Home buyers in Shanghai and other cities are deterred by elevated prices.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai remained little changed after banks reported sharply higher prices. Bank of China earnings rose 29% and AgBank earnings gained 30%. Most airlines passed on recently revised higher fuel prices to consumers. Home buyers in Shanghai and other larger cities are deterred by elevated prices.[/R]

The benchmark index in Shanghai closed almost unchanged on lingering questions about the size of U.S. Fed stimulus plan, but banks gained on better than expected earnings in the third quarter. However, Hong Kong stocks closed higher.

The Hang Seng Index in Hong Kong gained 0.20% or 46.28 to close at 23,210.86. The CSI 300 Index in China lost 0.18% or 6.18 to close at 3,397.69.

Two of China’s big banks reported record quarterly earnings on Wednesday reflecting solid economic growth and a waning anxiety about bad debts.

Bank of China posted a 29% rise in its quarterly profit while AgBank reported a 30% gain. Both results were better than expected by the market.

About 80% of Shanghai citizens looking to buy new homes have put on hold their plans, a national quarterly survey shows. The survey was conducted by China Economic Monitoring and Analysis Center and Sina.com.

The survey questioned residents in 16 cities, and Shanghai ranked 12th on the ranking of home buyer’s confidence, indicating a sluggish housing market in this quarter.

Major airlines in China have raised fuel surcharges for domestic flights from Wednesday after the National Development and Reform Commission increased aviation fuel costs by 220 yuan per ton on Tuesday.

The nation’s three largest carriers, China Southern Airlines, China Eastern Airlines and Air China, and six other domestic airlines said they would hike fuel surcharge by 20 yuan per person on flights less than 800 kilometers and by 30 yuan for flights for longer distance.

ZTE Corp, China’s largest telecom equipment maker, reported today a less than expected third quarter result because of lower sales and political hurdles faced by the company in India and Europe.

Net profit rose 18% for the quarter ended September from a year ago quarter, to 438.9 million yuan less than market expectations by nearly 15%.

Profit growth in China’s industrial companies continued to moderate in September due to rising production costs and a cooling manufacturing sector.

Net income of Chinese industrial companies rose 53.5% from a year earlier in the first three quarters of the year to 2.49 trillion yuan, from the pace of 55% for the first eight months, the National Bureau of Statistics said Thursday.

Record high gold prices may not deter consumers in China from buying “Year of the Rabbit” investment grade gold bars when available in December.

Dealers started booking on Wednesday and reported strong interest in the gold bar. These bars are expected to be priced around 328 yuan a gram, 16% increase from the previous year release.