Shanghai Indexes Fall 0.5%; GM China Sales Exceed U.S. Sales

Chandrasekhar Atreya
06 Jan, 2011
New York City

Shanghai stock indexes fell and energy stocks led the decliners after central bank governor confirmed rising inflation pressures. World Bank issued first yuan denominated bonds. GM the first foreign automaker to sell more than 2 million vehicles in a year in China sold as many cars as in the U.S.

[R]5:00 PM Hong Kong, China – Shanghai stock indexes fell and energy stocks led the decliners after central bank governor confirmed rising inflation pressures. World Bank issued first yuan denominated bonds. GM the first foreign automaker to sell more than 2 million vehicles in a year in China sold as many cars as in the U.S.[/R]

China stocks fell for a second day led by energy stocks after the central bank governor said inflation pressures are rising.

The Shanghai Composite Index fell 0.51% or 14.40 to 2,824.20 and the CSI 300 Index declined 0.50% or 16.02 to 3,159.64.

The Hang Seng Index in Hong Kong gained 0.12% or 28.48 to close at 23,786.30.

The supply of land designated for new residential development, excluding plots for the affordable housing program, plunged significantly in Shanghai in 2010, real estate Web site Soufun.com said Wednesday.

A total of 54 plots, or 3.84 million square meters, were released to the local market in 2010, compared with 79 plots, or 5.47 million square meters in 2009, Soufun Research showed.

The World Bank issued on Wednesday its first bond denominated in the Chinese yuan, hoping to borrow 500 million yuan over two years. The AAA rated World Bank said in a statement that the decision to borrow in the Chinese currency signals its interest in supporting the growth of the yaun market.

General Motor Co’s sales in China grew 29% in 2010 to a record 2.35 million vehicles, making GM the first foreign auto maker to surpass the two million unit mark for annual sales in the country, the Detroit-based company said.

Sale of home appliances in rural China surged 170% in 2010 from a year earlier, driven by a government subsidy, the Ministry of Commerce said Wednesday.

Sales reached 173.23 billion yuan in 2010, the ministry said in a statement on its Web site.

China is reportedly planning to start a monthly review of reserve requirements for banks this year as the country reforms its monetary policy.

Banks will face different required reserve ratios depending on the role they play in the economy, according to a report released Wednesday by China Securities Journal.

A U.S. company said Wednesday it wants to start construction this year in China one of the largest solar power plants in the world, after forming a partnership with a Chinese utility company.

First Solar Inc announced plans in 2009 for the facility in north China’s Inner Mongolia Autonomous Region. The company said it hoped to break ground in mid-2010 but a pre-feasibility study was not approved until September and regulators delayed the approval of higher payment rates for solar generated power.

China Guangdong Nuclear Solar Energy Development Co will become the majority partner in the facility’s first phase in Ordos City, First Solar said.

Stock Movers

GD Midea Holding Co, the second-largest publicly traded appliance maker, added 1.7% to 17.54 yuan after forecasting higher profit.

Ping An Insurance fell 4.1% to 52.59 yuan after the insurer reported its third quarter profit dropped 26% due to greater reserve requirements. China Pacific Insurance (Group) Co slid 1.6% to 22.42 yuan.

Among energy firms PetroChina slumped 0.9% to 11.14 yuan and Shenhua dropped 1.4% to 24.91 yuan. China Coal Energy Co, China’s second-largest coal producer, slipped 0.7% to 11.10 yuan.