HK Exchange Profit Surges, Stocks Rise

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

Hong Kong Clearing and Exchanges net income in 2007 jumped 145% to HK$6.2 billion from HK$2.52 billion in 2006. Media reports suggest that Bank of China has sold 500 million of its $7.95 billion of subprime loans linked to the international markets. Hong Kong stocks rose 1% tracking higher closings in the U.S. and Europe.

[R]6:00AM New York. 6:00PM Hong Kong – Bank of China sells all its subprime linked securities. Hong Kong Exchanges and Clearing profits beat analyst estimates.[/R]

Hong Kong stock averages rose today on strong earnings from Hong Kong Exchanges Clearing and the continued rally in metal prices as the dollar continues to slide.

Market Sentiment

In Hong Kong trading the Hang Seng Index increased 1%, or 228.39 to 23,342.73, and the China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, rose 1.7% or 217.94, to 13,065.89.

Daily turnover on main-board was HK$69.6 billion compared to HK$79.8 billion yesterday.

China Central Bank believes there is scope of raising interest rates

Xinhua News Agency reported today that China''s central bank governor Zhou Xiaochuan said today at a press conference on the sidelines of the annual parliamentary and political advisory sessions there is still scope for interest rate increase, but we have to keep global markets in perspective. Zhou added that the cut in interest in the U.S. was partially affecting China.

Zhou cited the influence of such adjustments on the domestic capital market and consumption, as the country is increasingly dependent on stimulating domestic demand, rather than exports, to spur economic growth.

Last year, the People’s Bank of China raised interest rates six times and also increased banks'' reserve requirement ratio ten times, followed by another reserve requirement hike in January.

Bank of China sells subprime securities

The People’s Daily Online reported that chairman of the Bank of China, Xiao Gang said the lender has sold all its collateralized debt obligations. The company had $7.95 billion of subprime securities in September, with only $496 million in the form of CDOs.

BNP Paribas SA estimates that the lender will write-down the value of its overseas securities by Rmb35 billion.

Gainers & Losers

Energy stocks rose after the price of crude oil for April delivery rose 5% to $104.52 a barrel after OPEC said in Vienna yesterday it will not raise its production target and on the unexpected decline in oil inventories in the U.S.

PetroChina gained 2.4 % to HK$11.04 and offshore oil specialist CNOOC Ltd jumped 3.2% to HK$12.24 as a result.

Commodity stocks also rallied after metal prices increased as investors hedged their positions. Lingbao Gold advanced 3.7% to HK$5.01, Zijin Mining surged 4% to HK$10.32 and Aluminum Corp of China rose 2.6% to HK$14.86.

Aluminum Corp of China also increased after Credit Suisse raised the stock to “neutral” from “underperform” as it raised aluminum price forecasts by 16% for 2008.

Ping An Insurance advanced 4.6% to HK$59 after securing approval from shareholders to raise Rmb121.7 billion from the A-share market.

HK Electric fell 1.1% to HK$44.80 after it reported today annual net profit rose 9% to HK$7.45 billion.

Company News

Hong Kong Exchanges and Clearing Profits rise

Hong Kong Clearing and Exchanges reported net income jumped 145% from HK$2.52 billion in 2006 profit to HK$6.17 billion in 2007.

The company also declared a final dividend of HK$3.40 per share, increasing the full year dividend for 2007 to HK$5.19, a 144% rise from a year earlier.

Revenues more than doubled to HK$8.39 billion. The stock gained 1.5% to HK$143.10.