China Region Indexes Lower on Weak Resource Sector

Chandrasekhar Atreya
25 Jan, 2011
New York City

Shanghai and Hong Kong stocks edge lower for the second day in a row ahead of the Lunar New Year day. Shanghai City

[R]5:00 PM Hong Kong, China – Shanghai and Hong Kong stocks edge lower for the second day in a row ahead of the Lunar New Year day. Shanghai City’s GDP expanded 9.9% in 2010. GM signs a two-year deal with Shanghai GM to export $900 million worth of autos and auto parts.[/R]

Stocks in Shanghai fell for the second day pushing the key index to its lowest closing since September 30.

The Shanghai Composite Index fell 0.68% or 18.29 to close at 2,677.43 while the CSI 300 slipped 0.53% or 15.58 to close at 2,938.65.

The Hang Seng Index in Hong Kong dropped 0.05% or 12.95 to close at 23,788.83.

The gross domestic product of Shanghai surged 9.9% in 2010 from a year ago to 1.6872 trillion yuan, the city government said at a press briefing today. The city’s consumer price index rose by 3.1% from a year earlier.

China is considering reduction of tax rebates for some highly-polluting and energy-consuming exports as it tries to discourage production of such products for exports.

“The National Development and Reform Commission, the Ministry of Finance and the Ministry of Commerce are considering cutting tax rebates for a list of goods, including rubber, non-ferrous metals, steel and construction materials, the Economic Information Daily reported on Monday.

China Southern Power Grid Corp, the smaller of the mainland’s two state-owned power distributors, aims to boost investment in grid networks by almost a third in the next five years, so that more and more homes in China will have access to electricity generated from renewable sources like wind.

The company said it had earmarked 400 billion yuan for investment in grid networks between 2011 and 2015, up 32% from 302.3 billion yuan it spent in the past five years.

Shanghai-listed Tsinghua Tongfang Co plans to list its subsidiary in Hong Kong in the second half of 2011 to raise funds to finance its overseas expansion plans, the company said on Monday.

General Motors Co plans to export $900 million in vehicles and parts to China under a two-year agreement signed with its joint venture, Shanghai GM.

Vehicle exports will be worth $500 million and components worth $400 million under the agreement, the company said in a statement on Sunday.

Cheung Kong (Holdings) Ltd, a real estate developer controlled by Li Ka-Shing said on Monday it plans to sell 3,500 apartments in Hong Kong this year, to generate more than HK$20 billion.

The sales revenue to be generated this year will be similar to what was generated in 2010 but the total amount will go up to more than HK$30 billion if it includes apartment sales in Singapore and on the mainland, Executive Director Justin Chiu told reporters in Hong Kong.

Stock Movers

China Petroleum and Chemical dropped 1.5% to 8.67 yuan after the March contract for oil declined as much as 0.6% in New York to $87.39 per barrel.

Price of gold for immediate delivery and aluminum futures dropped for the second day in London leading to a drop in metal stocks.

Yanzhou Coal fell 2.8% to 23.40 yuan and Zhongjin gold Co fell 2.5% to 32.28 yuan for the lowest close since August 6.

Shandong Gold Mining Co lost 3.4% to 41.72 yuan and Aluminum Corp of China dropped 2.7% to 10.14 yuan.

Small cap firm Jiangsu Skyray fell from its IPO price of 65 yuan by 17% to close at 54.16 yuan.