Shanghai Index Dips 2.9%; China

Chandrasekhar Atreya
20 Jan, 2011
New York City

Shanghai Indexes drop more than 2.8% while the index in Hong Kong drops 1.7%. China

[R]5:00 PM Hong Kong, China – Shanghai Indexes drop more than 2.8% while the index in Hong Kong drops 1.7%. China’s GDP expands at a better-than-expected 10.3% in 2010. The external outstanding debt of mainland China reaches $546.4 billion at the end of September.[/R]

Stocks in Shanghai dropped nearly 2.9% on tightening concerns after China’s GDP expanded at a stronger-than-expected rate of 10.3% in 2010.

The Shanghai Composite Index fell 2.89% or 79.64 to close at 2,678.45 while CSI 300 Index dropped at 3.27% or 99.63 to close at 2,945.22.

The Hang Seng Index in Hong Kong dropped 1.7% or 415.92 to close at 24,003.70.

China’s GDP expanded nearly 10% in the fourth quarter despite tightening measures, after inflation declined in December.

China’s GDP expanded by 9.8% in the fourth quarter from a year earlier, up from 9.6% growth in the third quarter. For the full year, GDP expanded by 10.3%, compared with 9.2% growth in 2009, the National Bureau of Statistics said today.

Gross domestic product hit 39.8 trillion yuan last year, Ma Jiantang, Director of the NBS told a press conference today.

U.S companies in China performed profitably in 2010 and are quite optimistic about their business prospects moving forward, according to a report released Wednesday by the American Chamber of Commerce in Shanghai.

According to the report, 87% of the U.S. companies in China saw their revenues grow last year, as compared to 47% in 2009 and 77% in 2008.

Investor enthusiasm for new listing on the Chinese mainland stock markets is waning as more than 60% of the new shares that debuted in 2010 have fallen below their initial public offering price.

A survey done by Hexun.com, China’s largest business news Web site, showed that 64.04% of participants said they would not subscribe for any future new listings, compared with 11.21% who said they would.

The survey also said 27% of the respondents cited the problem of overvalued IPO prices as the prime reason for the stock’s below-par performance subsequently.

The number of Chinese using mobile phones to access the Internet rose to 303 million by the end of 2010, up 23% from 2009.

The China Internet Network Information Center said this was due to a sales boom of smart phones in 2010. The report also said net users spent an average 2.6 hours a day surfing the net.

Alcoa Inc and China Power Investment Corp have agreed to collaborate on a range of aluminum and clean-energy projects worth more than $7.5 billion over the coming years.

The two companies signed a pact on Tuesday to develop wind and solar power projects as well as state of the art aluminum smelting operations in China and expand their trading relationship, Alcoa said in a statement.

The external outstanding debt of Chinese mainland reached $546.4 billion at the end of September, the State Administration of Foreign Exchange said Wednesday.

Of the total outstanding external debt, the outstanding registered external debt was $326.5 billion and the balance of trade credit was $219.9 billion, SAFE said.

Stock Movers

Banking stocks fell after several of them halted lending for less important projects as reported by 21st Century Business Herald.

Bank of China dipped 1.3% to 3.17 yuan and China construction Bank fell 2.3% to 4.66 yuan. Industrial and Commercial Bank of China dropped 1.9% to 4.15 yuan.

Jiangxi Copper Co shed 6% to 36.95 yuan while Shandong Gold Mining Co slipped 4.7% to 44.15 yuan.

Datong Coal Industry Co fell 4.4% 18.58 yuan.

Aluminum Corp of China however rose 4.4% to 10.45 yuan after the company’s parent said it had recovered from a loss and made a profit of 2.7 billion yuan in 2010.