Stocks in Shanghai, Hong Kong Edge Higher; Cathay Pacific Net Triples

Devan Biswas
09 Mar, 2011
New York City

Stocks in Shanghai were flat and investors focused on domestic issues. The policy makers are expected to announce more measures to curb property speculation and facilitate the sale of affordable homes. Hong Kong index increased as banks gained.

[R]5:00 PM Hong Kong – Stocks in Shanghai were flat and investors focused on domestic issues. The policy makers are expected to announce more measures to curb property speculation and facilitate the sale of affordable homes. Cathay Pacific placed orders for 25 planes with Airbus and Boeing.[/R]

Stocks in Shanghai and Hong Kong gained on the expectations that pro-reforms announcement from the policy makers meeting will drive growth. A slight and temporary ease in oil price also lifted the sentiment.

Chinese policy makers are looking for ways to provide more subsidies to rural population to stave off any anger and avoid the protests seen in the Middle East.

The policy makers are also looking to increase the defense spending and tighten security in Tibet and other southern provinces.

The Shanghai Composite Index increased for the fourth day in a row and added 2.21 or 0.1% to 3,002.15 and the CSI Index gained a fraction to close at 3,338.86.

The SCI index has gained 7% and leads other indexes for this year’s gains in Asia.

Hang Seng index in Hong Kong trading increased 0.4% to close at one-month high of 23,810.11 as trading increased to six-day high of HK$77 billion. For the year the index is up 3.4%.

Several small banks were asked to roll back recent tighter reserve requirements after small banks complained and regulators decided to focus on larger and national banks.

China is expected to announce another round of measures to control property prices as noted in China Securities Journal.

Qi Ji, Vice Minister of Housing and Urban-Rural Development said that property price increases in recent years were driven by the speculators and the recent measures are targeted at “those who are not in need of housing as accommodation.”

Cathay Pacific confirmed that it signed a deal to purchase 25 planes from Airbus and Boeing with a list price of $5.99 billion and is in discussion to buy 14 more planes.

Stock Movers

Industrial companies in Shanghai traded higher. China Erzhong Group Deyang Heavy Industries Co. increased 2.2% to 14.65 yuan and China First Heavy Industries Co. gained 3.4% to 6.95 yuan.

Property developers declined. Poly Real Estate decreased 1% to 13.15 yuan and Gemdale Corp fell 0.7% to 6.70 yuan.

Bank of China closed up 1.2% in heavy trading on the expectations of better than expected earnings in two weeks.

Resource companies closed lower after resource stocks declined. China Shenhua Energy Co Ltd declined 1.5% and PetroChina Co Ltd fell 0.7%.

China Petroleum & Chemical Co Ltd or Sinopec added 0.1% after company said it stopped exporting gasoline in March.

In additional several local media in Shanghai reported that regulators are mulling another fuel price increase and asked state controlled refineries to pass any price increase in crude oil above $80 a barrel to consumers.

In Hong Kong trading China Construction Bank increased 1.7% and ICBC added 1.5%.

Cathay Pacific gained 4.5% to HK$18.91 after it reported annual net profit tripled to HK$14 billion or $1.78 billion from HK$4.69 billion and revenues soared 34% to HK$89.52 billion. The company also plans to hedge 20% to 30% of its fuel needs for the next 1 to 3 years.

For 2010, the carrier transported 26.8 million passengers, an increase of 9% and 1.8 million tons of cargo, an increase of 18%.

The airline also declared final dividend of HK$78 compared to HK$10 in the year ago.

Air China added 1.1% to HK$7.40.

Phoenix Satellite Television Holdings Ltd increased 7% to HK$2.90 after it reported annual net income increased 41% to HK$421.8 million.