Shanghai Indexes Gain; China

Chandrasekhar Atreya
21 Jan, 2011
New York City

Shanghai Indexes gain for the day but dropped more than 2.7% in the week. China

[R]5:00 PM Hong Kong, China – Shanghai Indexes gain for the day but dropped more than 2.7% in the week. China’s budget deficit in 2010 was 1.6% of GDP well below the official target of 2.8%. China plans to double consumption of natural gas by 2015.[/R]

The Shanghai Composite Index gained 1.43% or 38.29 to 2,715.95 and fell 2.72% for the week. The CSI 300 Index gained 1.33% or 39.06 to close at 2,983.78 dropping 108.8 or 3.5% for the week.

China’s 10.3% economic growth in 2010 seems to have driven the largest expansion in the country’s rural incomes in a quarter century, bolstering efforts and need to spur consumption in the world’s most populous nation.

The per capita net income in China’s countryside rose 10.9% to 5,919 yuan, a statistics bureau report showed on Thursday. The gain, which was faster than for urban incomes for the first time since 1997, was due to acceleration in retail sales and industrial production in 2010.

China is targeting doubling the consumption of natural gas to 260 billion cubic meters by 2015, the Shanghai Securities News reported today.

The country plans to produce 170 billion cubic meters of the fuel from domestic fields and purchase an additional 90 billion cubic meters from overseas by 2015, the newspaper reported, citing government sources.

China’s budget deficit in 2010 was about 650 billion yuan, or 1.6% of gross domestic product, well below the official target of 2.8% set at the start of the year, according to preliminary data published by the Ministry of Finance on Thursday.

The figure was also lower than the deficit of 950 billion yuan, or 2.8% of GDP, registered in 2009.

Factory output and fixed-asset investment in China showed stable expansion in 2010 but is expected to slow this year as the country introduces policies to tackle inflationary pressures.

Industrial production grew 15.7% in 2010 and urban fixed-asset investment rose 23.8% from a year earlier to 27.8 trillion yuan, excluding inflation factors, the National Bureau of Statistics said on Thursday.

China Minmetals Corp said on Thursday its profits surged 123.2% in 2010 from a year ago on robust commodity prices.

Profit for 2010 was 7 billion yuan and business revenue was 255 billion yuan, up 49.62% from a year earlier, according to the company’s President Zhou Zhongshu.

China CITIC Bank Corp said on Thursday that it expects net profit for 2010 to surge more than 50% from a year ago to nearly 21.5 billion yuan as lending improved in the year.

The bank, China’s seventh-largest by assets, said the profit increase was a result of falling non-performing loan ratio as well as effective ways to cut back on costs, according to a statement submitted to the Shanghai Stock Exchange.

Stock Movers

Bank of China rose 1.3% to 3.21 yuan and ICBC rose 2% to 4.23 yuan after a report confirmed that the central bank injected yesterday 50 billion yuan to ease liquidity problems.

China Citic Bank surged 2.2% to 5.16 yuan after it said 2010 profit was more than 50% higher than the previous year.

Metal producers underperformed after metal prices fell in the London market. Zhongjin Gold Corp lost 1.3% to 33.12 yuan while Tongling Nonferrous Metals Co lost 1.6% to 27.30 yuan.

Jiangxi Copper Co slipped 0.7% to 36.71 yuan.