Shanghai Stocks Rebound; Hui Xian IPO Drops 8%

Devan Biswas
29 Apr, 2011
New York City

Stocks in Shanghai rebounded after falling for four days in a row on the prospect of higher inflation. For the week, the benchmark index dropped 3.3% in Shanghai. The Hang Seng index declined. Hui Xian Real Estate Investment Trust declined 7.8% on the first day of trading.

[R]4:30 PM Hong Kong – Stocks in Shanghai rebounded after falling for four days in a row on the prospect of higher inflation. For the week, the benchmark index dropped 3.3% in Shanghai. The Hang Seng index declined. Hui Xian Real Estate Investment Trust declined 7.8% on the first day of trading.[/R]

Stocks in mainland China trading rose on bargain hunting after the benchmark indexes dropped 4.6% in the last four trading sessions.

The market decline was led by the rise in inflation and the prospect of inflation surging 5% in April.

The benchmark index in Shanghai increased 0.9% or 24.47 to 2,911.51 but declined the most this week in the year with a loss of 3.3%.

The Shenzhen Composite Index gained 1.4% or 16.92 to 1,200.62.

The Hang Seng Index declined 0.4% to 23,720.81 on the persistent worries that more tightening may be needed to stem property prices and inflation on mainland.

The Hong Kong dollar edged lower against the U.S. dollar to HK$7.7716 from HK$7.768 in Thursday trading.

Markets in Shanghai and Hong are closed on Monday for International Labor Day.

Stock Movers

Hui Xian Real Estate Investment Trust completed the public offering and raised 10.5 billion yuan or $1.6 billion.

The initial public offering of the first yuan denominated real estate trust declined as much as 8%. The forecasted yield of 4.26% attracted only two times the offer size from investors.

The property company is controlled by the Li Ka-shing’ Cheung Kong (Holdings) Ltd and Hutchison Whampoa Ltd and owns 100,000 square meters or 1.1 million square feel with a mix of offices, hotel, a shopping mall and apartments.

Agriculture Bank of China declined 3.1% after the recent gains in the bank stocks.

Steel makers gained in Shanghai trading. Xinjiang Bayi Iron soared 9.1% to 14.32 yuan and Hebei Iron & Steel increased 2.7% to 4.59 yuan.

Power companies in Shanghai trading gained on the prospect the companies may be allowed to increase tariff this summer. China is estimated to suffer a shortfall of 30 gigawatts if weather conditions remain harsh according to an estimate released by the China Electricity Council.

Datang International Power Generation Co. soared 9.5% to 7.01 yuan and Huaneng Power International surged 6.3% to 6.09 yuan.