Shanghai Gains 1%; Rare Earth October Export Drops 77%

Chandrasekhar Atreya
24 Nov, 2010
New York City

Stocks in Shanghai gained for the day led by resource companies and financial brokers. China and Russia decide to use local currencies for bilateral trade settlements. Export of rare earth drops 77% in October from a month earlier. China bans hoarding of essential items.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai gained for the day led by resource companies and financial brokers. China and Russia decide to use local currencies for bilateral trade settlements. Export of rare earth drops 77% in October from a month earlier. China bans hoarding of essential items.[/R]

Shanghai’s key stock index gained the most in more than a fortnight led by metal producers and brokerages.

The Shanghai Composite Index gained 1.12% or 31.65 points to close at 2,859.94. The CSI 300 Index gained 2.25% or 69.87 to close at 3,177.04.

The Hang Seng Index in Hong Kong gained 0.56% or 127.72 to close at 23,023.86.

Shanghai plans to build new storage facilities which can guarantee supply of one week’s vegetable and meat for the city residents, according to an official of the Shanghai Commerce Commission.

“The current top priority is to tame inflation and ensure people’s lives are not distorted by irregular price rises,” Gu Jun, Vice Director of the Commission said on Tuesday at the Shanghai Xijiao International Agricultural Products Trade Center in Qingpu District.

After having talks with the Chinese Premier Wen Jiabao in Moscow on Tuesday, Prime Minister Vladimir Putin of Russia said both countries have agreed to increase the use of the national currencies in bilateral trade.

China has just allowed the yuan to start trading against the Russian ruble in its interbank market.

China said Tuesday it would punish six companies for selling diesel oil above the set prices, in an effort to ease the diesel shortage and keep soaring prices in check. The list includes affiliates of the country’s two oil giants.

The companies including Sinopec’s units in Wuhan and Luoyang and PetroChina’s Wuhan unit were found selling diesel at prices as high as 8% above the government set price, according to a statement posted on the Web site of the National Development and Reform Commission, the nation’s top economic planner.

Exports of rare earths in October plunged 77% from a month earlier after the government slashed export quotas for the second half of the year to conserve resources.

China exported 830 tons in October compared to 3,660 tons in September, according to the country’s General Administration of Customs.

China banned hoarding of oil, coal and other essential commodities to ensure supplies and cool prices. These are the latest moves to counter inflation that jumped to a 25-month high of 4.4% in October.

Seventy seven medium and large-sized steel companies in China reported a combined gross profit of more than 7 billion yuan in October, up 21% from a month ago, according to the China Iron & Steel Association.

Although the profit was the highest in recent months, margin remained low at 2.84% in the first nine months as the local steel mills were caught between high raw material prices and overcapacity.

Stock Movers

Industrial and Commercial Bank of China declined after it resumed trading following a rights offer and fell by the daily limit of 10% to 4.42 yuan weighing heavily on the key index.

Other banks gained. China Construction Bank gained 2.4% to 4.71 yuan and Agricultural Bank of China gained 0.8% to 2.64 yuan.

Metal producers rebounded after futures prices of copper and aluminum gained on the London Market.

Jiangxi Copper Co added 2.5% to 35.03 yuan and Aluminum Corp of China gained 1.8% to 10.38 yuan. Shandong Gold Mining Co rose 1.1% to close at 55.94 yuan.

Brokerages rallied in trade. China Merchant Securities gained 2.4% to 20.90 yuan while CITIC Securities Co, the largest brokerage in China, gained 6% t 13.25 yuan.