China Trade Surplus Soars; Stocks Gain

Chandrasekhar Atreya
10 Dec, 2010
New York City

China key stock index gains in trade to reverse most of the losses in the week. Trade surplus in the month rose to $22.9 billion and exports soared 35%. China freezes coal prices at current levels to arrest inflation.

[R]5:00 PM Hong Kong, China – China key stock index gains in trade to reverse most of the losses in the week. Trade surplus in the month rose to $22.9 billion and exports soared 35%. China freezes coal prices at current levels to arrest inflation.[/R]

China stocks rose, erasing most of the weekly loss in the key benchmark index, after the country reported much better than expected trade data, leading to gains in commodity stocks, exporters and insurers.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, added 1.07% or 30.09 to 2,841.04. The CSI 300 climbed 1.24% or 38.61 to 3,161.98.

For the week the SCI index lost 0.05% and the CSI 300 index gained 0.12%.

The Hang Seng Index in Hong Kong lost a marginal 0.04% or 8.89 to close at 23,162.91. For the week the index gained 1.25%.

China reported a better-than-expected trade surplus of $22.9 billion in November, the Customs Bureau said today.

Exports rose 35% from a year earlier to $153.3 billion, while imports grew 38%.to an unprecedented $130.4 billion leading to the above mentioned surplus, the bureau said. The trade surplus exceeded $20 billion for the fifth month in a row.

Communist party leaders are meeting in Beijing to set guidelines for the 2011 economy after the politburo indicated on December 3 that officials will likely tighten monetary policy.

China Petrochemical Corp, the parent company of Sinopec, will acquire Occidental Petroleum Corp’s Argentine oil and gas unit for $2.45 billion to meet domestic demand through overseas reserves.

The deal, which is subject to government approvals, is the first such investment in Argentina’s oil and gas sector by the company according to an e-mailed statement from Sinopec Group.

China has ordered the freezing of power station coal supply prices for 2011 at this year’s level, the China Coal Transport and Distribution Association said on its Web site, citing a statement from the National Development and Reform Commission.

The controls are aimed at curbing inflation and the country will allow 769 million tons of coal to be traded under the contract in 2011, the association said.

Greenland Group will build the world’s third-tallest building in Wuhan in Hubei Province, at a cost of 30 billion yuan.

The 606 meter high Wuhan Greenland Center, planned to be completed in five years, will be dwarfed by the 632 meter Shanghai Tower scheduled to be completed in 2014 and the Burj Khalifa in Dubai, the world’s tallest skyscraper at 828 meters.

BP Plc may join other foreign companies to sell yuan-denominated bonds as it seeks to diversify funding channels to cover costs of the Gulf of Mexico oil spill.

Youku.com Inc recorded the largest gain for a U.S. initial public offering in five years since Baidu Inc surged more than 400% after its IPO in 2005. E-Commerce China Dangdang Inc gained 87% in its debut.

Youku.com Inc, China’s largest online video firm, soared 161% to $33.44 on Wednesday, after completing a $203 million IPO.

Home prices in China rose at the slowest pace in a year in November after the government raised the reserve ratio for banks twice and expanded measures to limit the risk of asset bobbles.

Home prices in 70 cities across China, increased 0.3% in November when compared to October and climbed 7.7% from a year earlier, the statistics bureau said on its Web site today. The yearly advance was slower than the 8.6% rise recorded in October from a year ago.

Sale of new cars in China is expected to jump 30% to 18 million this year, thus beating the existing world record of 17.4 million units sold in the U.S. in 2000, according to an estimate released by China Association of Automobile Manufacturers on Thursday.

China is expected to lead the world markets for the second year in a row.

Stock Movers

Jiangxi Copper climbed 1.6% to 37.65 yuan after outbound and inbound shipments climbed and prices surged.

PetroChina, the country’s largest oil company, rose 0.6% to 11.45 yuan, and China Shenhua Energy Co, the largest coal producer, gained 0.98% to 24.03 yuan.

Among the insurers China Life added 1.89% to 23.34 yuan and Ping An Insurance rallied 2.9% to 60.90 yuan, the highest in a month.