Record Budget Surplus, Stan Chart Earnings

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

Financial Secretary of the Hong Kong Special Administrative Region John Tsang told the Legislative Council today that budget surplus for the fiscal 2007-2008 will jump to a record HK$115.6 billion, which is about 7.2% of Hong Kong

[R]6:00AM New York, 6:00PM Hong Kong - HK GDP increased 6.3% in 2007. Standard Chartered earnings help spur financial stocks.[/R]

Hong Kong stocks rebounded after Standard Chartered released better than expected earnings helped lift financial stocks. Record trade surplus in fiscal 2007-2008 lifted investors’ sentiment.

Market Sentiment

In Hong Kong trading Hang Seng Index rose 3.2% or 769.09 at 24,483.84, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, surged 4.6% or 610.06 to 13,936.90.

Daily turnover on main-board was HK$99.4 billion compared to HK$68.7 billion yesterday.

Budget Surplus in Sharp Rise

Financial Secretary of the Hong Kong Special Administrative Region John Tsang told the Legislative Council today that budget surplus for the fiscal 2007-2008 will jump to a record HK$115.6 billion, which is about 7.2% of Hong Kong’s gross domestic product.

Tsang added that economic growth leapt 6.3% in 2007. By the end of the fiscal year, fiscal reserves are likely to reach HK $84.9 billion.

Exports in 2007 surged 7.9%, while domestic private consumption rose 7.8%. In addition, the unemployment rate declined to 3.4%, the lowest since the first quarter of 1998.

The financial secretary proposed a one-time tax reduction of 75% on wages and salaries tax and tax under personal assessment for 2007-2008, subject to a ceiling of HK$25,000. The lower tax is estimated to benefit 1.4 million taxpayers at a cost of HK$12.4 billion.

Hong Kong economy is forecasted to rise between 4% and 5% this year.

Home loan values grew 29.2% to HK$29.4 billion

The Standard news reported today that the Hong Kong Monetary Authority survey indicated that the value of new home loans rose 29.2% to HK$ 29.4 billion in January.

New loans jumped 26% in January to 14,126 and 39% to 11,372 for apartment resale. Mortgage delinquency ratio and rescheduled loan ratio fell to 0.09% and 0.19% respectively.

Gainers & Losers

Financial stocks rallied after Standard Chartered reported yesterday that its second half profit rose 23% led by strong growth in the Asian market. The earnings lifted bank stocks.

StanChart advanced 7.6% to HK$259.2, HSBC gained 3.3% to HK$123.6, China Construction Bank jumped 6.1% to HK$5.96 and China Merchants Bank spiked 7.1% to HK$27.10.

Commodity stocks advanced on rising metal prices. Zijin Mining Group Co Ltd rose 8.7% to HK$10.58. The local news report suggested that the company passed domestic environmental test.

Aluminum Corp of China climbed 4.4% to HK$15.80 after Shanghai Securities News reported it will buy Rmb4.18 billion worth of stakes in six sister companies from its parent, Aluminum Corp of China.

Energy stocks increased after crude oil for April delivery gained 0.5% to a record $101.35 a barrel. Sinopec Corp edged up 5% to HK$8.76 and on the speculation that the company is likely to receive higher subsidies.

Asian Markets Update

In Tokyo Nikkei 225 Index closed higher 206.58 or 1.49% to 14,031.30, in Hong Kong Hang Seng index increased 769.09 or 3.24% closed to 24,483.84. Australia ASX 200 index increased 101.10 or 1.78% to close 5,767.20.

In South Korea Kospi Index increased 11.76 or 0.69% to close at 1,720.89, in Thailand SET index closed lower 2.63 or 0.32% to 832.04 and Indonesia JSE Index edged increased 1.27 or 0.05% to 2,740.14. Sensex index in India increased 19.80 or 0.11% to 17,825.99.