Wharf, BoChina Earnings Lift HK Stocks

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

Hong Kong surplus in the fourth quarter 2007 jumped to 78.3 billion and in the year rose to 114.5 billion or 7.1% of GDP. Higher tax receipts and rising property values played a key role in the surge. Hong Kong, earlier had proposed to lower personal taxes on low income families on the rising government receipts. ICBC net income surged 65% to Rmb 82.3 billion lifting bank stocks. Jiangxi Copper declied 2% after reporting 12% drop in 2007 profit.

[R]6:00AM New York, 6:00PM Hong Kong – Hong Kong surplus rose to HK114.5 billion in 2007.[/R]

Hong Kong stock averages rose led by financial stocks on strong earnings results posted by the Industrial and Commercial Bank of China and property company, Wharf.

Market Sentiment

In Hong Kong trading the Hang Seng Index rose 0.68% or 152.49 at 22,617.01 points, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, jumped 1.14% or 133.22 to 11,860.22. In Shanghai trading, CSI 300 Index gained 0.22% or 860 to 3,914.37.

Daily turnover on main-board was HK$89.91 billion compared to HK$100.6 billion yesterday.

Hong Kong BoP account surplus rises to HK 114.5 billion

The Census and Statistics Department reported yesterday that fourth quarter surplus in 2007 was HK$78.3 billion or 17.5% of GDP, compared to HK$13.9 billion in the third quarter.

Current account surplus in the quarter was HK$59.0 billion or 13.2% of GDP, less than HK $63.7 billion or 15.4% of GDP in the third quarter of 2007.

Also a net inflow of financial non-reserve assets of HK$1.1 billion was recorded in the fourth quarter of 2007, against a net outflow of HK$73.3 billion in the third quarter of 2007.

In the year 2007 total surplus was HK$114.5 billion or 7.1% of GDP, compared with a surplus of HK$46.7 billion or 3.2% of GDP in 2006. In the year current account surplus was HK$213.7 billion or 13.3% of GDP in 2007, from HK$178.2 billion or 12.1% of GDP in 2006.

In addition, a net outflow of financial non-reserve assets eased to HK$146.6 billion in 2007, less than HK$160.3 billion in 2006.

Gainers & Losers

Financial stocks advanced after Industrial and Commercial Bank of China reported yesterday that net profit increased 64.9% to Rmb82.3 billion driven by strong growth in net fees and commission income.

HSBC advanced 0.24% to HK$127.30, Industrial and Commercial Bank of China gained 2.88% to HK$5.35 and Bank of China surged 1.85% to HK$3.30 on higher fourth-quarter profits.

The world’s largest mobile telecom operator gained 0.71% to HK $113.30, while China Life, which posted a 42% increase in second-half 2007 profit, closed down 0.18% at HK$27.40.

Henderson Investment closed up at HK$0.91, while its parent Henderson Land advanced 2.4% to HK$55.30. Henderson Investment announced after the market closed that it had received a bid from a joint venture partner to buy assets of the firm for an undisclosed amount.

Property company Wharf rose 0.53% to HK$37.95 after it reported a 22% increase in profit to HK$13.14 billion for 2007. However, Cheung Kong fell 0.73% to HK$108.4 ahead of its earnings announcement.

Commodity stock Jiangxi Copper Co Ltd slid 1.78% to HK$14.34 after the company reported that it posted a 12.4% drop in profit in 2007 to Rmb 4.15 billion missing analysts expectations of Rmb 4.5 billion to Rmb 4.6 billion.

Oil refiner PetroChina also declined 1.32% to HK$9.69.


[R]5:00AM New York, 7:00PM Tokyo - Japan’s February trade surplus increases 0.9% to 970 billion yen.[/R]

Stocks in Japan fell despite a government report that showed exports, especially to emerging markets, helped offset a slowing demand in the U.S.

Market sentiment

In Tokyo trading Nikkei 225 dropped 0.3% or 38.59 to 12,706.63, and the broader Topix Index fell 0.4% or 5.43 to 1,237.55.

In the first section of the Tokyo Stock Exchange 7.3 billion shares worth 815 billion yen were traded and in the second section 170 million yen valued at 2.76 billion yen changed hands.

Of the Nikkei 225 stocks 88 rose, 124 declined and 11 were unchanged. Toho Zinc Co. Ltd. led advancers in the Nikkei 225 index shares with an increase of 7.21% after commodity prices gained.

Japan’s trade surplus widens

Japan’s Ministry of Finance reported today on its Web site that exports accelerated 8.7% to 6.98 trillion yen in February driven by demand from emerging markets such as China and India.

Imports advanced 10.1% on the year to 6.01 trillion yen, yielding a trade surplus of 0.9% at 970 billion yen.

While Japan''s trade surplus with the U.S. declined for the sixth consecutive month by 13.3% to 696.9 billion yen, the trade surplus with Asian nations including China climbed 104.8% to 922.2 billion yen, the seventh straight increase. Exports to Europe gained 7.2%.

U.S. consumer confidence declines in March

The Conference Board reported yesterday that the Consumer Confidence Index, which is based on a representative sample of 5,000 U.S. households, fell further to 64.5 in March from 76.4 in February.

The Expectations Index which measures an outlook for six months declined to 47.9 from 58.0, while the Present Situation Index fell to a 35-year low at 89.2 from 104.0 in February.

According to the report, those claiming business conditions are """"bad"""" increased to 25.4% from 21.3% and those claiming business conditions are """"good"""" declined to 15.4% from 19.1%.

Also consumers'' appraisal of the job market was more pessimistic in March than a month ago.

Japan to lose 2.6 trillion yen on gasoline tax

Bloomberg news reported today that JP Morgan Chase said in an interview that if Japan’s government fails to extend legislation on higher gasoline tax when it expires on March 31 it could lose at least 2.6 trillion in revenue.

The opposition Democratic Party of Japan, which controls the Upper House of Diet, is likely to block the extension.

Gainers & Losers

Toho Zinc Co Ltd. led advancers in the Nikkei 225 index shares with a rise of 7.21% followed by increases in Sumitomo Metal Mining of 4.63%, in Itochu Corp. of 4.39%, in Marubeni Corp. of 4.26%, and Mitsui & Co. of 4.25%.

Commodity stocks rose after a rally in metal prices yesterday. Copper futures gained 1.6% and gold advanced 1.8%. Mitsubishi Corp edged up 3.20%.

Crude oil prices also increased 0.4% to $101.22 per barrel yesterday. Inpex gained 1.87% on the news.

Citizen Holdings led decliners in the Nikkei 225 index shares with a drop of 6.75% followed by losses in Chuo Mitsui Trust of 6.10%, in Nisshinbo Industries of 5.778%, in Shionogi & Co. of 5.10%, and Mizuho Financial Holdings of 4.82%.

Other financial stocks fell as well. Mitsubishi UFJ Financial Group declined 4.82% and Mizuho Trust & Banking slid 4.46%.

Exports also declined on weakening consumer sentiment in the U.S. Canon slipped 2.93% and Sony dropped 0.70%.

Hino Motors fell 4.18% after the company reported yesterday that operating profit will rise 25% to 46 billion yen for the year ending March 31 from 36.7 billion yen a year earlier below market expectations of 46 billion yen.

Company news

The Nikkei news reported today that All Nippon Airways Co Ltd will set up a low-cost Asian airline as early as the fiscal year starting April and open office in Hong Kong. The online news service said the airline might establish a joint venture or acquire another firm.

Asian Markets Index review

In Tokyo Nikkei 225 Index closed lower 38.59 or 0.30% to 12,706.63, in Hong Kong Hang Seng index increased 152.49 or 0.68% closed to 22,617.01. Australia ASX 200 index increased 63.00 or 1.18% to close 5,381.40. In Malaysia KL Composite index increased 15.47 or 1.26% closed to 1,245.42.

In South Korea Kospi Index increased 4.74 or 0.28% to close at 1,679.67, in Thailand SET index closed lower 2.74 or 0.33% to 817.57 and Indonesia JSE Index edged increased 21.02 or 0.87% to 2,440.64. Sensex index in India decreased 130.66 or 0.81% to 16,086.83.