Hang Seng Plunged 5%

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

Hang Seng index plunged 4.8% to 22,301 on the weakness in global markets, rising inflation in China and worries related to corporate profits. China reported 75% rise in foreing direct investment in the first two months of 2008 from 2007. Capital inflows from U.S. companies rose 43.7% in the first two months, while inflows from the European Union advanced 110%.

[R]6:00AM New York, 6:00PM Tokyo - China’s FDI increase 75% to $18.13 billion in the first two months of 2008.[/R]

In Hong Kong trading the Hang Seng Index declined 4.8% or 1,121.12 to 22,301.64, and the China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, fell 6.1% or 783.29, to 12,094.06.

Daily turnover on main board was HK$106.8 billion from HK$89.9 billion yesterday.

[Hong Kong FDI increase 75%

China’s Ministry of Commerce reported yesterday that the country’s foreign direct investment increased 75% from last year to $18.13 billion in the first two months of 2008.

Foreign direct investment in February climbed 38.3% from a year ago to $6.9 billion and increased 109.8% in January at $11.2 billion.

According to statistics from the ministry of commerce, capital inflows from U.S. companies rose 43.7% in the first two months, while inflows from the European Union advanced 110%.

China retail sales up 20%

The Xinhua News Agency reported the National Bureau of Statistics said yesterday that domestic retail sales increased 20.2% to Rmb1.7 trillion driven by rising food prices and the Lunar New Year consumption.

The increase represents a 5.5% gain from the comparative period last year. Food costs jumped 23.3% in February and non-food prices rose 1.6% from a year earlier.

In addition, urban consumption gained 20.8% year-on-year to Rmb1.18 trillion compared with 18.9% increase in rural residents to Rmb559.1 billion. Also, wholesale and retail sales spiked 20% to Rmb1.46 trillion, while catering and hotel activity rose 23.1% to Rmb 253.6 billion.

The bureau noted that clothing sales increased 24%, daily consumer goods sales climbed 21.1% and household appliances sales edged up 18.8%.

On the overall retail sales advanced 16.8% to Rmb 8.92 trillion in 2007, after rising 3.6% in 2006.

Financial performance remains stable

People’s Daily Online reported that the People’s Bank of China said yesterday that the broad measure of money supply M2 rose by 17.48% to Rmb 42.1 trillion in February from a year ago.


M1, the narrow measure of the money supply, including cash and demand deposits gained 19.2% to Rmb 15.02 trillion In February.

Gainers & Losers

Financial stocks plunged on reports U.S. investment banks and analysts said the $200 billion intervention in the money market by the U.S. Federal Reserve Bank was not enough to stem further losses in the credit markets. China Life declined 6.3% to HK$27.65 and China Construction Bank fell 6.1% to HK$5.38.

Transport and energy stocks fell after crude oil prices rose to a record high of $110.12 a barrel. Oil refiner Sinopec Corp. shed 8.4% at HK$7.

China Southern Airlines fell 9.7% to HK$6.23. Hong Kong flagship carrier Cathay Pacific Airways declined 4.5% to HK$15.

However, China Railway Construction Corp, which had a record demand for its $5.4 billion Hong Kong IPO, closed up 12% at HK$12.