China Stocks Surge; Evergreen IPO Soars 26%

Devan Biswas
04 Nov, 2010
New York City

Stocks in China region surged following a rally in Asia. U.S. Fed expanded its U.S. Treasury purchase program y $600 billion, effectively printing new money that may fuel inflation in the future. Resource stocks and commodities prices increased.

[R]5:30 PM Hong Kong – Stocks in China region surged following a rally in Asia. U.S. Fed expanded its U.S. Treasury purchase program y $600 billion, effectively printing new money that may fuel inflation in the future. Resource stocks and commodities prices increased.[/R]

Stocks in Shanghai and Hong Kong trading surged after the U.S. Federal Reserve expanded the purchase of U.S. Treasuries by $600 billion.

The move was widely expected by investors in China and exceeded to top end of the forecast of $500 billion. Stocks in Hong had surged in advance of the move and closed higher again today.

The Fed’s move is tantamount to printing money to revive economic activities is expected to the U.S. economic recovery but is widely feared to fuel inflationary pressures. The dollar edged today in trading but is hovering near lows against the yen and the euro.

The Shanghai Composite Index increased 1.9% to 3,086 and CSI 300 Index gained 1.8% to 3,480.50. Hang Seng Index increased 1.6% to 24,535.90.

Asian markets closed higher sharply after the latest U.S. Fed stimulus. Markets in India, Japan, Indonesia, Singapore, Malaysia, Philippines and South Korea edged higher.

Resource stocks led the rally in Shanghai trading as commodities prices rose and the dollar eased in international markets.

China Shenhua Energy Co. increased 1% and PetroChina soared 3.7% to 11.88 yen.

Retailers Shanghai Bailian soared 9.1% and Shanghai Friendship gained daily limit of 10% after resuming trading on four-month suspension. Statement issued by two companies said that Shanghai Friendship will offer 1.7 shares for every two shares of Shanghai Bailian shares.

The share exchange valued the acquisition of Shanghai Bailian for $2.4 billion.

Evergreen International Holdings Ltd surged as much as 37% in Hong Kong trading on the first day of trading. The menswear maker closed at HK$5.80 or up 26% from its initial offer price and was oversubscribed 1,231 times.

Evergreen priced its offering at HK$4.60 a share and 147 million shares changed hands on the first day of trading.