Hong Kong Up 1.5%

123jump.com Staff
19 Feb, 2008
New York City

Financial and metal stocks rally lifted stocks in Hong Kong. Hang Seng index closed up 364 to 24,123. Copper, zinc, and aluminum increased more than 2%. Qatar sovereign fund decision to invest in Credit Suisse lifted financial stocks. Bank of East Asia gained after a report that it may report stronger than expected earnings. ICBC and Bank of Communication gained.

[R]6:00AM New York, 6:00PM Hong Kong – Hong Kong stocks recovered from the losses earlier on a rally in financial and metals companies.[/R]

Stocks in Hong Kong jumped led by financial stocks on reports Qatar will boost is holding in Credit Suisse and after Bank of China said it will report increased profit growth for 2007. Commodities also gained as metal prices continued to rally on increased demand and supply constraints.

Market Sentiment

In Hong Kong trading, the Hang Seng Index rose 1.5% or 363.92 to 24,123.17, and the China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, jumped 2.5% or 342.69 to 13,972.94.

Daily turnover on main-board was HK$78.8 billion compared with HK$78.1 billion recorded yesterday.

Metal Prices Increases

Commodity prices continued to advance with copper prices rising for the third straight week on the back of increased demand from China. According to the Customs Office in Beijing, import of the commodity increased 6.6% in January from December.

Copper prices for March delivery advanced 3.2% to $7,974 a ton. Also Aluminium for three month delivery rose by $5 to $2,825 per ton, while zinc and nickel advanced 2.2% and 0.1% to $2,365 a ton and $27,650 per ton correspondingly.

Qatar to Boost Shareholding Credit Suisse

The Sunday Times reported over the weekend that Qatar, which has expressed its interest in investing in lenders that have been caught up in the global market turmoil, will invest in Credit Suisse from its sovereign fund. The investment may be increased to $15 billion.

Gainers & Losers

Financial stocks rose on news of Qatar’s investment in Credit Suisse and on reports that U.K. banks Barclays and Lloyds TSB Group will report strong earnings growth.

In addition, Reuters news reported that Bank of China Chairman Xiao Gang said the lender will report a robust earnings growth for 2007. The stock closed up 7.8 % at HK$3.3.

Industrial and Commercial Bank of China Ltd rose 3.5% to HK$5.38 after reporting yesterday that it had managed to lower its non-performing loan ratio in 2007 on tighter risk control.

Also, Bank of Communications jumped 4.7 % to HK$9.74.

Buoyant commodity prices drove stocks higher. Angang Steel climbed 6.2% to HK$18.62 after Asian steelmakers negotiated for a lower-than-expected 65% increase in the price of iron ore imports from Brazil mining company, CVRD.

Nickel miner Xinxin Mining edged up 12.4% to HK$6.54 after nickel prices rose 0.1% to $27,650 a ton.

China Life increased 2.8 % to HK$31.15 and Ping An Insurance climbed 3.6 % to HK$59.45.


[R]5:00AM New York, 7:00PM Tokyo –A sustained rally in metals and oil lifted stocks of trading companies in Tokyo trading.[/R]

Stocks in Japan rallied led by a rise of 3% in copper prices, more than 2% increase in aluminum and zinc, and 2% gain in crude oil prices.

Market Sentiment

In Tokyo trading Nikkei 225 rose 0.9% or 122.5 to 13,757.91, and the broader Topix Index gained 0.9% or 1.90 to 1,332.99.

In the first section of the Tokyo Stock Exchange 9.5 billion shares valued at 1 trillion yen were traded and in the second section 406 million shares worth 4.6 billion yen changed hands.

Of the Nikkei 225 stocks 125 gained, 94 declined, and 6 were unchanged. Itochu Corp. led advancers in the Nikkei 225 stocks with a rise of 8.04% after Nikko Citigroup said the company’s shares were “strongly undervalued”.

Commodity Prices

Commodity stocks also gained after metal prices jumped to record highs. Copper prices rose for the third straight week on declining stockpiles and after the Customs office in Beijing said January imports to China rose 6.6% from December to 239,500 tones.

Copper prices for March delivery advanced 3.2% to $7,974 a ton in London yesterday.

Similarly, Aluminium for three months delivery also climbed by $5 to $2,825 a ton, while zinc and lead jumped 2.2% and 2% to $2,365 and $3,030 respectively.

Crude oil for March delivery also advanced 1% yesterday on reports Iran oil minister Gholamhossein Nozari said yesterday OPEC might cut output when it meets next month.


Government seeks BOJ successor

The Nikkei News online reported today that the Government will submit proposals of the possible successor to the incumbent BOJ Governor Toshihiko Fukui to the Diet next week. Fukui’s term will expire on March 19.

Rio Tinto to Secure Premium Iron Ore Prices

The Independent news online reported today that Rio Tinto Iron Ore president Sam Walsh said yesterday that the company will be negotiating for premium iron ore prices with Asian steelmakers to reflect freight costs that are less than half what it costs to move the commodity from Brazil.

Economists believe that prices will be near the top range reached between Asian steelmakers and CVRD.

Gainers and Losers

Itochu Corp. led advancers in the Nikkei 225 index shares with a rise of 8.04% followed by gains in Fuji Electric House of 6.46%, in Resona Holdings of 6.13%, in Trend Micro Inc. of 5.94%, in Nisshinbo Industries of 5.89%.

Itochu Corp gained after Nikko Citigroup said the company’s shares were undervalued.

Financial stocks also rose on reports that Qatar will boost its holdings in Credit Suisse as part of its moves to invest in lenders infected by the subprime mortgage crisis. Mizuho Financial Holdings edged up 5.40% and Mizuho Trust and Banking climbed 4.23%.

OKI Electric Industries led decliners in the Nikkei 225 index shares with a rise of 4.08% followed by losses in Showa Denko KK of 4.08%, in Sumitomo Chemical Co of 4.04%, in UBE Industries of 3.62%, and in Mitsui Engineering & Shipbuilding of 3.14%.

Toshiba and San Disk Corp Investments

Kyodo news reported today that Toshiba Corp and its ally SanDisk Corp. plans to invest 1.8 trillion yen to increase semiconductor production. Part of the investment will be used in the construction of a NAND flash memory factory in Kotakami, on the Iwate Prefecture and an extra facility within Toshiba’s current factory in Yokkaichi, Mie Prefecture.

Nippon Oil and Sakhalin

Bloomberg news reported today that Nippon Oil signed a long-term contract with Sakhalin Oil & Gas Development Co in Russia starting this year. The contract will be subject to review within years.

Under the arrangement, Nippon Oil will buy 720,000 barrels every quarter from the Sakhalin-1 project.

International Markets

In Tokyo Nikkei 225 Index closed higher 122.51 or 0.90% to 13,757.91, in Hong Kong Hang Seng index increased 363.92 or 1.53% closed to 24,123.17. Australia ASX 200 index increased 60.70 or 1.09% to close 5,619.10.

In South Korea Kospi Index increased 24.28 or 1.43% to close at 1,720.52, in Thailand SET index closed higher 10.63 or 1.29% to 835.62 and Indonesia JSE Index edged increased 27.17 or 1.01% to 2,711.87. Sensex index in India increased 27.61 or 0.15% to 18,075.66.