Gold Lifts HK Stocks, Budget Surplus of $100B

123jump.com Staff
09 Jan, 2008
New York City

Property stocks and gold miners helped the market recoup early losses in Hong Kong trading. Hang Seng index bucked the downtrend in the morning session rising to a six week high at 1.9% or 502.95 at 27,615.85. Gold stocks climbed after record gold price.

[R]5:00AM New York, 7:00PM Hong Kong - Hong Kong budget surplus to reach HK$100 billion.[/R]

Hong Kong stock indexes gained buoyed by rising metal and oil prices, including speculations that the U.S. Federal Reserve will cut interest rates on fears of falling consumer spending.

In Hong Kong trading Hang Seng index bucked the downtrend in the morning session rising to a six week high at 1.9% or 502.95 at 27,615.85, while the China Enterprises index of Hong Kong-listed shares rose 3.1% or 479.75 at 16,139.46, the biggest one day percentage gain since November 29.

Daily turnover on main-board soared to HK$120.3 billion compared to HK$114.9 billion recorded yesterday.

The Sing Tao Daily reported today that Hong Kong Finance Secretary John Tsang Chun-wah may announce in the city’s budget next month measures including a one-time tax return with a higher cap, lowering the marginal tax bands and tax rate, and an increase in the personal tax concession ceiling.

Tsang will also offer taxpayers a one-time tax rebate of 70% to 80% of salaries tax, compared to increase of 50% in 2006. He is also expected to raise the total allowance available under the cap which was set at HK$15,000 last year.

The Standard online news also reported today that Hong Kong's budget surplus will probably quadruple from thegovernment October estimates of HK$25.4 billion to HK$100 billion.

Commodity stocks gained after gold and copper prices increased. Gold prices reached $882.55 per ounce on a falling U.S. dollar.

Gold producer Lingbao climbed 5% to HK$5.93, while Jiangxi Copper soared nearly 9% to HK$20.55. Zinc producer Hunan Nonferrous Metals Corp jumped 7.4% to HK$5.55.

Crude oil for February rose 0.7% to $97 per barrel. Cnooc Limited spiked 5.7% to HK$13.90. PetroChina Co Limited rose 2.7%.

Property companies gained on lingering speculation the U.S. Federal Reserve will cut the key rate this month to sustain growth. Sun Hung Kai Properties edged up 2.4% to HK$172.80. Cheung Kong Holdings Limited increased 2.4% to HK$146.

Parkson Retail Group Limited jumped 4.3% to HK$86.35 on news its majority shareholder was selling close to 8 million shares at a discount at about HK$78.66 per share. The stock was quoted at HK$82.80 at yesterday’s close.

However exporters fell on fears of a slowdown in the U.S. Li & Fung dropped 2% at HK$27.4.

Lenovo plunged 10.4% to HK$5.88 after research firm CLSA downgraded the stock to sell on rising speculation of a slowdown in information technology spending in 2008 and increasing costs. HSBC tumbled 0.3% to HK$127.90.

China High Speed Transmission Equipment dropped 6.2% to HK$18.02 following a secondary share placement.


[R]5:00AM New York, 7:00PM Tokyo-World Bank says Japan economic growth to slow to 1.8% in 2008.[/R]

In Tokyo trading Nikkei 225 bucked a 0.2% decline by mid-day to close up 0.49% or 70.49 to 14,599.16, while the broader Topix Index soared 19.26 to 1,422.32.

In the first section of the Tokyo Stock Exchange 9.8 billion shares worth 1.2 trillion yen were traded and in the second section 261 million shares worth 4.3 billion yen changed hands.

Of the Nikkei 225 stocks 144 gained, 71 declined, and 10 were unchanged.

Shimizu Corporation led advancers with a rise of 6.85% followed by Sumitomo Metal Industries climbing 6.59%.

Commodity stocks gained as well as metal prices increased. Sumitomo Metal Industries rose 5.01% and Mitsui & Company soared 4.85%.

The World Bank reported yesterday in its Prospects for Global Economy report that it projects economic growth in Japan will slow to 1.8% in 2008 on the back of the global credit crunch and a strengthening yen.

The Bank expects GDP growth of 2.0% in 2007, followed by 2.2% in 2006.

According to the World Bank, developments in the U.S. are expected to influence conditions in Japan.

“Inflation is not yet permanently in positive territory, making it unlikely that Bank of Japan will follow its initial tightening steps with further increase in interest rates,” read the report.

Bank of Japan Governor Toshihiko Fukui said in a speech marking 150 years of Franco-Japanese diplomatic relations at the Banque de France in Paris yesterday that globalization is making it impossible for central bank’s to assess the economic situation without taking a look at global economic trends.

Fukui added that central bank cooperation is becoming more important as financial transactions are faster and deeper such that “if a shock occurs in one country, it will immediately spill over onto numerous other financial markets”.

Kyodo news online reported today that Japan Patent Office has cut filing and other fees for trade marks by an average 43% and for patents by 12%.

Applications and maintenance of patents for 10 years will be lowered for the first time since 1984 from 480,000 yen to 430,000 yen, while applications and renewal fees for trademarks will be cut for the first time in four years from 130,000 yen to 70,000 yen.

The necessary legislation will be submitted to the ordinary Diet session this month as reductions are scheduled in June.

Of the Nikkei 225 index shares Shimizu Corp led advancers with a rise of 6.85% followed by gains of 6.59% in Sumitomo Metal Industries, 6.40% in Obayashi Corporation, 5.12% in Sekusui House, and 5.01% in Sumitomo Metal Mining.

Commodity stocks rose on rising metal prices and as platinum prices for December delivery climbed 1.1% to 5,370 yen a gram on the Tokyo Commodities Exchange.

Exporters also gained after the yen fell from 109.31 to 109.34 against the dollar. Canon Corporation spiked 0.61%, Casio Computer edged up 1.71% and Sony Corporation jumped 2.65%.

Mitsumi Electric Company led decliners of the Nikkei 225 index shares with a fall of 4.62% followed by losses of 4.52% in NTT Data Corporation, 3.78% in Trend Micro Incorporated, 3.74% in Nippon Soda Company, and 3.29% in Advantest Corporation.

NTT Data Corporation fell after it said today its tender offer for German information service company Intelligence AG was successful.

Nikkei news online edition reported today that Matsushita Electric Industrial Company will construct a new facility for about 95 billion yen to boost capacity at its chipmaking plant in Toyama Prefecture.


[R]4:00AM New York, 8:00PM Sydney- ASX 200 index declined 0.7% despite gains in resource stocks.[/R]

ASX 200 index lost 0.7% or 40.4 to close at 6,087.70.

The Preliminary market turnover was 1.66 billion shares worth $5.94 billion, with 367 shares moving up, 885 moving down, and 356 unchanged.

The most actively traded stock was Retail Star, with 67.61 million stocks changing hands with a value of $2.001 million.

Commonwealth Bank of Australia today became the third bank to raise its mortgage rates after increasing its variable interest rate on mortgages to recoup higher funding costs. Third bank has raised interest rates in Australia in the last four days without a similar move from the central bank.

The bank raised its rates for variable home loans by 0.1% to 8.67% for new and existing loans and its variable business loans by 0.15 percentage points. The increase would be effective on Friday.

National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd were the first two banks to raise their rates for variable home loans this month.

Newcrest Mining Ltd's share gained 6.6% to a record after precious metal prices surged to a high. Gold for immediate delivery rose by 1.5%, to a record $891.70 an ounce today. Investors are increasingly using precious metals and agricultural commodities to hedge the falling dollar.

Gold has added 6% this year after adding 31% in 2007. Oil is nearly unchanged but rose 57% in 2007.

Lihir Gold gained 6.8% and was the leading performer on the exchange today while Sino Gold Mining Ltd rose 6.2%.

The Australian dollar gained following a rise in retail sales in November above economists' expectations.

The Australian dollar traded lower against the U.S. dollar at $0.8828 up from yesterday's $0.8794.

Of the ASX 200 index shares, Lihir Gold Limited led the gainers with a rise of 6.8% followed by increases in Newcrest Mining of 6.6%, in Sino Gold Mining of 6.2%, in Coeur D'Alene of 5.6%, and in Pan Australia Resource Limited of 5%.

Of the ASX 200 index stocks, Allco Finance Group led the decliners with a fall of 7.7% followed by losses in Centro Retail of 7.2%, in Compass Resource of 6.9%, in Paperlinx Limited of 6.5% and in DB Trust of 5.9%.