Shanghai Stocks Rise; Dalian Port Surges 39%

Chandrasekhar Atreya
07 Dec, 2010
New York City

Stocks in Shanghai and Hong Kong closed higher as new home price index in Shanghai stayed above average for the third week in a row. Dalian Port surged 39% on first day of trading in Shanghai.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai and Hong Kong closed higher as new home price index in Shanghai stayed above average for the third week in a row. Dalian Port surged 39% on first day of trading in Shanghai.[/R]

Stocks in Shanghai rebounded from the morning losses as new home price index edged up in November and banks lifted cash reserves in anticipation of revised ruling for a tighter lending.

The Shanghai Composite Index gained 0.65% or 18.68 to close at 2,875.86 and the CSI 300 Index added as much as 1.1% or 34.77 to close at 3,200.34.

The Hang Seng Index in Hong Kong added 0.82% or 190.46 to close at 23,428.15 after receiving a boost from a reversal of losses in the Shanghai market.

Prices of new homes in Shanghai continued to stay above the 23,000 yuan per square meter barrier for the third week in a row as government policies to curb prices are yet to take effect in the mid- and high-end segments.

New homes, excluding those built for relocated residents under urban redevelopment plans, were sold for an average rate of 23,489 yuan per square meter last week across the city, a rise of 2% from the previous week, according to Shanghai Uwin Real Estate Information Services Co data release on Monday.

The existing house index in Shanghai edged up 0.2% in November, from a month ago, to extend its gains for the third month in a row.

The index, which monitors price fluctuations of existing houses, added 5 points to reach 2,558 in November, according to the latest report released by the Shanghai Existing House Index office, tracking 70 major residential areas across the city.

Only 7 out of the 78 state-owned firms whose core business is not real estate have pulled out of the property market despite a central governmental order demanding companies to withdraw from real estate market, China Securities Journal reported on Monday.

Big banks in China were locking up large amounts of cash on expectations of a further increase in reserve requirements causing the benchmark seven-day repo rate to surge.

Changsha Zoomlion Heavy Industry Science & Technology Development Co is seeking as much as $2.1 billion in a Hong Kong stock offering as Chinese growth spurs demand for construction equipment.

The world’s largest supplier of concrete-making machinery plans to offer 870 million shares at HK$13.98 to HK$18.98 a piece, according to the terms of the transaction. The company which is already listed in Shenzhen will have a market value of $12.7 billion if the offering is priced at the top range.

China International United Petroleum & Chemical Co, the largest oil trader of China and the trading unit of China Petroleum & Chemical Corp, plans to import 200,000 tons of diesel in December, 67% more than initially planned last month, according to a company official.

Price of power-coal, with an energy value of 5,500 kilocalories per kilogram, slipped 0.6% from a week earlier to between 795 yuan and 810 yuan a ton on Monday, according to data from the China Coal Transport and Distribution Association for its first decline since September 8, 2010.

China has further expanded the program of cross border trade settlement in yuan by allowing more Chinese companies to enter the trial program, the central bank said on Monday.

The People’s Bank of China and other related authorities agreed to let 67,359 exporters located in 16 provincial areas of China to settle their businesses in yuan, up from the previous 365.

Dalian Port, the biggest in northeast China, surged 39% to 5.24 yuan on its debut in Shanghai on Monday.

The port, the first from China to be listed in Shanghai and Hong Kong, would use the funds to expand oil and ore projects, according to the company’s statement.

Stock Movers

Gold miners extended previous gains after gold bullion prices closed at a record of $1,416 per ounce in New York.

Shandong Gold Mining Co added 5% to 57.93 yuan. Zijin Mining Group Co, China’s largest gold producer, also rose 5% to 8.85 yuan.

Other metal producers rose along with property developers.

Jiangxi Copper Co rose 2.4% to 36.92 yuan and Aluminum Corp of China rose 1.1% to 10.27 yuan.

China Vanke, the country’s largest property developer, gained 2% to 8.66 yuan while Glendale Corp edged up 0.8% to 6.02 yuan.