Hang Seng Declines 3%, Yuan Record high

123jump.com Staff
03 Mar, 2008
New York City

Stocks in Hong Kong and in Asia fell sharply on the persistent worries related to the U.S. economy. Hang Seng index declined 3% following 2.6% losses in Friday trading in the U.S. Japan fell 4% and India plunged 5%. Yuan rose against dollar to a record for the 19th time this year. HSBC reported 10% below forecasted 2007 earnings.

[R]6:00AM New York, 6:00PM Hong Kong – Hong Kong stocks fell on the rising worries related to the U.S. economy, weakness in dollar, and weak profit outlook for HSBC.[/R]

Hong stocks fell sharply on the worries related to the health of the U.S. economy and a sharp decline in dollar against yuan, yen, Australian dollar and Indian rupee. Chinese yuan rose to the nineteenth new record against dollar in the last two months and closed at 7.105 to one dollar. Yuan is now up 13% from its July 2005 floating and up 2.6% for the year.

Asian markets across the region fell led by a plunge of 5% in India, 4% in Japan and 3% in Hong Kong and Australia.

Market Sentiment

In Hong Kong trading Hang Seng Index declined 3.07% at 23,584.97, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, plummeted 3.53% at 13,439.92.

Daily turnover on main-board turnover was HK$81.1 billion compared with HK$80.1 billion yesterday.

Small companies target through train

The Standard news reported today that chairman of the Hong Kong Securities Association and Christ Fund Securities, Chris Cheung Wah-fung, said he will propose that small securities firm also participate in the through-train program.

The project is mainly designed to allow mainland individuals to invest directly in Hong Kong.

Cheung added that he believes the through-train scheme will be launched before July, after new government ministers and officials are appointed.

Registered capital rises 22.7%

The People’s Daily Online reported today that the State Administration for Industry and Commerce said China’s private sector including self employed households registered capital increase of 22.7% from a year ago in 2007 to Rmb10.1 trillion.

Registered capital of private firms reached Rmb9.4 trillion, contributing 92.74% of the total, while capital of self-employed households held the rest and grew 13.64%.

Gainers & Losers

Uni-President China Holdings Ltd surged 6.71% to HK$4.61 after saying it will buy $30 million worth of shares in the soon to be listed Want China Holdings Ltd at the IPO price.

HSBC Holdings shed 1.16% at HK$119.30 before it reported its results. However after the markets closed the bank reported 10% below estimated profit in 2007.

Hang Seng bank also fell 2% to HK$147.10.

Ping An Insurance Co. dropped 3.4% to HK$58.75 on the release of lock up period for stocks worth $31 billion in A shares.

Port stocks fell on rising concerns over the state of the U.S. economy. China Merchants Holdings fell 7.5%.

Cathay Pacific fell 2.1% and Hong Kong Exchanges and Clearing Ltd fell 3.8% ahead of the company’s earnings reports later this week. Cathay is expected to report a rise of 43% to HK5.8 billion in 2007 net income on the growing long haul traffic to Europe and the U.S. Analysts are estimating a profit decline between 20% and 25% in 2008 on rising oil prices and a decline in cargo traffic to the U.S.

China Eastern Airlines fell 3.17% after CNAC said in a statement the reason why the CEA board made such a decision was that the two sides had not yet had the chance to hold discussions on the bid.

According to Xinhua News Agency, a source with the board of CEA''s listing arm said earlier that it ""is willing to study any sincere bid that conforms with legal procedures and is better than Singapore Airlines offer"".