Shanghai Drops 2%; New Homes Sales Jump 35%

Chandrasekhar Atreya
23 Nov, 2010
New York City

Stocks in China region drop on inflation worries and bank reserve ratio hike. The 5-week decline in sale of new homes in Shanghai is halted with a gain of 35% in the last week. Shanghai

[R]5:00 PM Hong Kong, China – Stocks in China region drop on inflation worries and bank reserve ratio hike. The 5-week decline in sale of new homes in Shanghai is halted with a gain of 35% in the last week. Shanghai’s container port maintains its position as number one in for the third month running in October.[/R]

Shanghai stocks dropped for the second day running after the hike in reserve ratio for banks had its cascading effect on investor sentiment on Tuesday. Indexes declined led by banks, developers and miners. Weak global sentiment also played a role in dragging investors’ sentiment lower.

The Shanghai Composite Index lost 1.94% or 56.09 to close at 2,828.28, the lowest since October 11. The CSI 300 Index dropped 2.04% or 64.76 to close at 3,107.18.

Hong Kong stocks closed lower tracking losses in mainland trading. The Hang Seng Index in Hong Kong dropped 2.67% or 627.88 to close at 22,896.14.

New home buying sentiment rebounded in Shanghai for the first time in six weeks as sales picked up at mid to high-end projects.

New home sales jumped 34.6% to 214,000 square meters last week, putting a halt to a five-week decline since mid October, Shanghai UWin Real Estate Information Services Co said. The figure excluded homes built for relocated residents under urban redevelopment plans.

The container port in Shanghai remained the world’s busiest port for the third month in a row since overtaking Singapore in August, the port authority said.

Throughput of containers was up 8.1% from a year ago in October to 2.35 million twenty equivalent units, compared to Singapore’s 2.31 million TEU’s, the Shanghai Statistics Bureau said in a statement today.

China Shipping Development Co signed a $122 million deal with two Shanghai-based firms to build four ships to expand its cargo business, according to a statement filed by the company with the Shanghai Stock Exchange filed on Monday.

The central government announced last Wednesday a new list of remedial measures that included price controls and relief to poor households struggling to cope with rising food prices.

The State Council, China’s cabinet on last Saturday ordered local governments to take further measures to control rising prices.

Some 64 new residential projects for development are to be released in December in Shanghai, which represents a 22% decrease from a month ago, according to data hosted on the Web site of real estate company Soufun.com on Monday.

The developments include apartments and villas as mixed projects in Pudong, Baoshan, Jiading and Songjiang.

Dalian Port Co said Tuesday it plans to raise as much as 6 billion yuan in its Shanghai IPO, with a price range of 3.60 yuan to 4.00 yuan. The company said it will sell 1.5 billion A shares, less than its earlier plan of selling 2.4 billion, due to volatile market conditions, in a statement to the Shanghai Stock Exchange.

Air China said it has placed an order for $1.8 billion on Rolls-Royce Group Plc for supply of engines. The London-based company said Monday it will provide Trent XWB engines for ten Airbus A350 XWB aircraft and Trent 700 engines for ten Airbus A330 aircrafts.

This is the second major order from China for Rolls-Royce this month after it signed $1.2 billion deal with China Eastern Airlines.

The Hong Kong Stock Exchange plans to extend its trading hours from March of 2011 to maintain its competitive edge in the region.

According to the plan, Hong Kong’s stock market will trade from 9:30 a.m. to 12 p.m. and the afternoon session will be from 1:00 p.m. to 4:00 p.m. The lunch hour will be trimmed to one hour from the current ninety minutes.

Pudong International Airport in Shanghai handled 3.38 million travelers in October, a 28.9% increase from a year ago, the Shanghai International Airport Co, said on Monday.

The increase was attributed to the World Expo and the city’s booming economy.

Stock Movers

Agricultural Bank of China lost 1.1% to 2.62 yuan while China Cosntruction Bank Corp declined for the sixth day and fell 1.5% to close at 4.6 yuan.

Jiangxi Copper Co fell 5.4% to 34.16 yuan and Aluminum Corp of China dropped 4.1% to 10.20 yuan. China Shenhua Energy Co, the largest coal producer in China, fell 2.3% to 24.37 yuan.

Poly Real Estate fell 2.6% to 11.93 yuan capping the drop of 31% in this year. China Vanke Co, the largest developer by value in China, dropped 2.1% to 7.92 yuan.