Hong Kong Rises, Karachi Plunges 4.7%

123jump.com Staff
31 Dec, 2007
New York City

Hong Kong Stocks advanced on the last day of trading on the hopes that the U.S. will furhter cut its interest rates at the end of January. Hang Seng index increased 1.6% or 442.05 to close at 27,812.65. For the year 2007 the index surged 39%, fourth best performing market in the region. Property and bankk stocks closed higher. Markets in mainland China, Indonesia, South Korea, and Japan were closed. Karachi Stock Market Index fell 4.7% on its first day of trading after Bhutto was killed.

[R]5:00AM New York, 7:00PM Hong Kong - Hang Seng Index soars 39% in 2007./R]

Hong Kong stock averages rose driving the Hang Seng index to its best performance since 1999 on speculation the U.S. Federal Reserve will cut the key interest rate by a quarter percentage point to 4% on January 30. The index for the year surged 39%.

In Hong Kong trading Hang Seng index jumped 1.62% or 442.05 to 27,812.65, up 39% for the year, while the China Enterprises index of H shares rose 0.83% to 16,124.72.

Stock turnover reached HK$43.4billion in trading session.

Markets in Japan, China, South Korea, Philippines, Indonesia and Vietnam are closed today.

The State Council over the weekend that the new Income Tax Law and Implementation rules, through which domestic and foreign firms will be levied the same corporate tax rate at 25%, will take effect today. Online publication Standard reported the news.

Foreign-invested enterprises registered before March 16 will either receive a five-year grace period where there will be subject to a gradually increasing interest rate, or will be entitled to complete the period of tax exemption that they will be promised.

However high technology industries will be given preferential treatment if they are supported by the state and located in special economic zones or the Pudong district of Shanghai.

According to the State Council Website, companies owning intellectual property registered after January 1 will be exempted from any corporate tax for the first two years, while 12.5% will be levied in the third through the fifth year.

Governor of the People’s Bank of China, Zhou Xiaochuan said on the bank’s website in a New Year message that the central bank will maintain a tight monetary policy in 2008 using balanced monetary policy tools to manage the economy.

Property stocks in Hong Kong rose on increased speculation that the U.S. will cut its benchmark interest rate on January 30 after November sales of new homes plunged 9% to a 12-year low to an annual rate of 647,000.

Cheung Kong climbed 4.8% to HK$144.20, Sun Hung Kai Properties rose 4.15% and Hang Lung Properties edged up nearly 6%.

Energy stocks also rose as crude oil futures remained above $96 per barrel. China''s top offshore oil and gas producer Cnooc Limited rose 3% and PetroChina jumped 2%.

Oil refiner Sinopec Corp rose 0.68% to HK$11.78 after it unveiled plans to buy interests in three oil refineries and 63 petrol stations from its parent for 3.66 billion yuan.

Airliners AirChina climbed 7% and China Eastern gained 6% after Reuters reported Friday that Air China’s chairman Li Jiaxiang had been appointed chief of China’s civil aviation regulator as part of a government plan to boost the nation’s airline industry.

China Power International Development Limited announced to the Hong Kong Stock Exchange yesterday that it has agreed to buy a 25% stake of Guangzhou Power Enterprise Group Limited for 749.5 million yuan inorder to capitalize on growth in industrial production in Southern China. The agreement is subject to approval by the state controlled Assets Supervision and Administration Commission.

Bloomberg news reported today Intime Department Store, partly owned by U.S. private equity investor Warburg Pincus LLC, bought stakes in two property companies in Hangzhou, China for 1.05 billion yuan.