Shanghai Index Down 14.3% in 2010; China Steps Up Land Auction Scrutiny

Chandrasekhar Atreya
31 Dec, 2010
New York City

Shanghai key benchmark index gains more than 2% for the day but lost 14.31% in 2010. Hang Seng index rose 5.3% in the year. China steps up scrutiny of recently sold but undeveloped land and seized at least two land parcels from developers. Non-ferrous metals international trade surged 46.5%.

[R]5:00 PM Hong Kong, China – Shanghai’s key benchmark index gains more than 2% for the day but lost 14.31% in 2010. Hang Seng index rose 5.3% in the year. China steps up scrutiny of recently sold but undeveloped land and seized at least two land parcels from developers. Non-ferrous metals international trade surged 46.5% in the first 11 months of the year.[/R]

China markets gained on the last day of trading as metals and resource stocks led the gainers. The ongoing rally in copper and other base metal prices lifted resource stocks as Australia battled with widespread flooding.

China stocks gained for the third day to narrow the losses in the year led by metal stocks.

The Shanghai Composite Index gained 1.76% or 48.50 to 2,808.08 and the CSI 300 Index gained 2.09% or 64.16 to 3,128.26. The Shanghai Composite Index shed 469.06 or 14.31% for the year while The CSI 300 Index fell 447.42 points or 12.51% in the year 2010.

The Hang Seng Index in Hong Kong gained 0.16% or 36.11 to 23,035.45 for the day to gain 1,162.95 or 5.32% for the year.

The yuan strengthened beyond the 6.6 yuan per dollar for the first time since 1993.

China published on Thursday a list of 26 land parcels nationwide that had been idle for more than two years. These parcels covered a total area of 201.7 hectares.

Five residential projects in Songjiang and Minhang districts of Shanghai were also on the list, the Ministry of Land and Resources said Thursday. The ministry also said that these parcels should be reclaimed by the authorities as undeveloped. Developers are required to pay 20% of the land price as fine if the parcels are left undeveloped for more than a year and less than two years.

The government re-auctioned two pieces of residential land in Shanghai’s northwest Jiading District at lower prices after they were returned by the previous successful bidders. The developers have struggled to develop properties on the lack of capital.

Greenland Group paid 1.93 billion yuan for the Zhennan land parcel, lower than the peak closing price of 2.42 billion yuan in January.

China Guangdong Nuclear Power Group Co plans to build two reactors of 1,000 megawatts each in the first phase of the Lufeng nuclear power plant in south China’s Guangdong Province.

The National Development and Reform Commission, China’s top economic planner, approved the early stage study on the first phase of the project, CGNPC said in a statement.

China’s trade in non-ferrous metals, imports and exports, surged 46.5% in the first 11 months of the year when compared to the prior year period, to $108.48 billion yuan, the Ministry of Industry and Information Technology said on Thursday.

Imports grew at an annual 40.6% to $83.15 billion yuan while exports rose 69.6% to $25.33 billion yuan, the ministry said in a statement on its website.

The State Administration of Foreign Exchange issued Thursday new guidelines on foreign exchange market dealers and grouped them into three types.

The three groups are spot trading market makers, forwards and swap trading market makers and comprehensive market makers, according to the new guidelines that will take effect tomorrow.

Capitaland, one of Asia’s largest real estate developers, announced a plan to set up a commercial project in Shanghai’s Changning District.

The new Raffles City, the second in Shanghai, will be built on 60,000 square meters of land close to Zhingshan Park with a total investment of 9.6 billion yuan, with the first phase planned to be completed by 2015.

Stock Movers

Jiangxi Copper and Yunnan Copper Industry Co surged more than 7% after copper prices advanced to a record in London and New York.

Jiangxi Copper rallied 7.6% to 45.17 yuan and Yunnan Copper soared 10% to 27.50 yuan.

Citic Securities, the largest brokerage in China, added 2.4% to 12.59 yuan and Poly Real Estate Group Co added 1.5% to 12.70 yuan.

China Southern Airlines Co led carriers as the yuan climbed on Thursday to the strongest level against the dollar since the end of 1993. China Southern rose 2.1% to 9.74 yuan.