China Retail Sales Surge, Home Price Rise Slows

123jump.com Staff
13 Aug, 2008
New York City

Retail sales in China rose at 23.3% in July after gaining at 23% rate in June. In addition, real estate prices rose 7% in the month, but at the slowest pace in the year so far from a year ago. The price rise has steadily declined from a rise of 11.3% in January to 9.2% in May. The report also notes that prices of existing homes advanced 6% year-on-year during the period, which is 1.5 percentage points higher than June.

[R]6:00AM New York, 6:00PM Hong Kong - China’s retail sales rise 23.3% in July. Real estate prices rise in the month but at the slowest pace in the year s far from a year ago.[/R]

Hong Kong stocks fell led by financial and telecommunication stocks as concern mounted over signs of slowing growth.

Market Sentiment

In Hong Kong trading Hang Seng Index declined 1.61% or 347.57 to 21,293.32, and the China Enterprises Index slumped 2.92% or 334.18 to 11,111.37. In Shanghai trading CSI 300 Index rose 0.02% or 0.52 to 2,444.67.

Daily turnover on main-board was HK$69.3 billion compared with HK$70 billion yesterday.

China Retail Sales Increase 23.3% in July

The National Bureau of Statistics reported today that domestic sales advanced 23.3% to Rmb 862.9 billion in July, which is 0.3 percentage point higher than the previous month and 6.9 percentage point higher than the same period a year earlier.

As a result, China''s retail sales of consumer goods edged up 21.7% to Rmb 5.96 trillion from a rise of 15.5% in the comparable quarter a year ago. Urban consumption gained 24% on the year to Rmb590.5 billion, compared with an increase of 21.8% to Rmb272.4 billion in the same period a year ago.

NBS added that wholesale & retail sales gained 23.3% to Rmb 730.3 billion, catering and hotel activity climbed 26.5% to Rmb 116.8billion, clothing sales rose 26.8%, daily consumer goods jumped 19.5%, household appliances spiked 18.8% and grain and edible oil prices increased 18.3% on the year.

Real Estate Price Increase Slows

Xinhua News Agency also reported today that the statistics bureau reported that real estate prices in the countries 70 major cities gained 7% in July, which is 1.2 percentage points lower than in May.

The prices gains have been declining from 11.3% in January, 10.9% in February, 10.7% in March, 10.1% in April, 9.2% in May and 8.2% in June.

Prices of new houses edged up 7.9%, which is 1.3 percentage point lower than a month ago.

Haikou, Urumqi, Ningbo and Beijing led prices higher, while 17 cities such as Haikou, Dali, Shenzhen and Chengdu experienced declines.

The report also notes that prices of existing homes advanced 6% year-on-year during the period, which is 1.5 percentage points higher than June.

In addition, new non-residential use buildings were 4.9% higher than in the same month a year ago as prices of office buildings rose 6.7%, while prices of commercial real estate increased 4.1%.

Gainers & Losers

Hong Kong stocks declined on the back of weak financial stocks after investors were unnerved by the downgrade of the Industrial and Commercial Bank of China from “outperform” to “neutral” by Credit Suisse.

China Construction Bank dropped 6.1% and ICBC declined 5.4% as a result.

Telecommunication stocks fell. China Mobile slid 1.8%, China Unicom tumbled 4.3% and China Netcom plummeted 3.9% on rising worries over slowing growth in China.

Hong Kong Exchanges & Clearing fell 3% after reporting that profit in the second quarter ended June 30 declined 6%.

China Cosco rose 6% after a 28% slump in recent weeks, oil producer CNOOC soared 4.2% after its recent drop as well.

Realty stock Country Garden shed 10.6% to HK$3.80 as Morgan Stanley cut its price estimate on the stock by 29% to HK$4.49.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 280.55 or 2.11% to 13,023.05, Hang Seng index in Hong Kong decreased 347.57 or 1.61% closed to 21,293.32. ASX 200 index in Australia decreased 102.00 or 2.02% to close 4,951.60. The KL Composite index in Malaysia decreased 6.25 or 0.56% closed to 1,112.53.

The Kospi Index in South Korea decreased 14.40 or 0.91% to close at 1,562.72, SET index in Thailand closed lower 1.33 or 0.19% to 701.60 and JSE Index in Indonesia increased 5.94 or 0.29% to 2,063.52. The Sensex index in India decreased 119.01 or 0.78% closed to 15,093.12.