China Stocks Extend Gains; HSBC Drops, Poly Real Estate Rises

Devan Biswas
01 Mar, 2011
New York City

Stocks in China gained after manufacturing index declined to a six-month low and fell for the third month in a row. Poly Real Estate Group rose after 2010 net rose 40%. HSBC Holdings declined 5% after it lowered target rate of return on equity. Trading volume on mainland Chinese exchanges soared.

[R]5:00 PM Hong Kong – Stocks in China gained after manufacturing index declined to a six-month low and fell for the third month in a row. Poly Real Estate Group rose after 2010 net rose 40%. HSBC Holdings declined 5% after it lowered target rate of return on equity. Trading volume on mainland Chinese exchanges soared more than 20%.[/R]

China manufacturing index showed a slowing growth as the government tighten loans to arrest rising prices and slow economic growth.

The Shanghai Composite Index increased 13.72 or 0.47% to 2,918.92 and the Shenzhen Component Index added 0.4% or 46.28 to close at 12,948.72.

Trading turnover on two exchanges soared to 302.1 billion yuan or $45.8 billion from 264 billion yuan a day ago.

The Hang Seng Index rose 58.40 or 0.3% to 23,396.

China Federation of Logistics and Purchasing said manufacturing index in February declined to six-month low to 52.2% from 52.9% in January. The index declined for the third month in a row.

HSBC Holdings dropped 5% to HK85.50 after it reported more than double 2010 earnings of $19 billion. The company also set lower return on equity target between 12% and 15% from the previous estimate range of 15% to 18%.

Stock Movers

Cement producers gained for the second day after Chinese Premier Wen Jiabao said over the weekend that China plans to build 10 million affordable homes this year and in all 36 million in the five year to 2015.

Anhui Conch increased for the fourth day in a row and gained 2.6% to 35.51 yuan and Gansu Qilianshan Cement Group Co added 4.1% to 19.22 yuan.

Jiangxi Wannianqing Cement Co. Ltd added 4.2% to 17.66 yuan and Henan Tonglie Cement Co., Ltd rose 5.7% to 16.80 yuan.

China home prices rose 0.5% in February according to a survey real estate site SouFun Holdings Ltd.

Property developers gained. China Vanke increased 1.7% to 8.30 yuan and Poly Real Estate Group Co. increased 3.5% to 12.70 yuan after it reported 2010 net rose 40% from a year ago.

Tnghua Dongbao Pharmaceutical Co. dropped 5.1% to 14.99 yuan.

ICBC increased 0.2% to 4.26 yuan and China Construction Bank added 0.6% to 4.85 yuan. Ping An increased 1.5%.

In Hong Kong trading, mainland focused resource companies expand. China Overseas Land & Investment Ltd rose 1.9% and Commercial Banks of China Ltd added 1.7%.

Aluminum Corp of China Ltd declined 4% in Hong Kong and rose 2% in Shanghai after the largest aluminum maker swung to net profit in 2010.