Global Rally Lifts Stocks in HK; Shanghai Falls

123jump.com Staff
02 Apr, 2008
New York City

Stocks in Hong Kong surged after a steep rise in the U.S. indexes and an increase in European stock markets. Hang Seng Index retreated from a 4.6% increase in the morning to close up 3.20% or 734.97 at 23,872.43, and the China Enterprises Index rose 4.7% to 12,807.35. In Shanghai, CSI 300 fell 1% to 3.547.98. Investors in China continue to dump stocks. Net redemptions in investment funds in China fell by Rmb 17 billion.

[R]6:00AM New York, 6:00PM Hong Kong - Easing U.S. credit market fears leads a rally in Hong Kong stocks. Shanghai continues to decline.[/R]

Stocks in Hong Kong surged after a steep rise in the U.S. indexes and an increase in European stock markets. U.S. markets rose after Lehman Brothers said that broker will increase its offering to raise $4 billion. Investors have been concerned, after the demise of Bear Stearns that Lehman may not have adequate liquidity. Markets in Europe rose after UBS announced a plan to complete rights offering of $15 billion and pre-announced $12 billion loss in the first quarter.

In Hong Kong trading the Hang Seng Index retreated from a 4.6% increase in the morning session to close up 3.18% or 734.97 at 23,872.43, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, rose 4.66% or 569.99 to 12,807.35.

In Shanghai trade, CSI 300 slumped 0.97% or 34.88 to 3.547.98. Investors in China continue to dump stocks.

Daily turnover on main-board was HK$114.7 billion compared with HK$78.03 billion yesterday.

China’s first quarter venture capital deals rise 12.9%

Xinhua News Agency reported today that ChinaVenture- a consulting firm that provides services for VC investors, investment banks and entrepreneurs both at home and abroad- reported that 73 venture capital deals were completed in the first quarter, reflecting a 13% rise in the comparative period a year ago at $585 million. Only 72 deals were completed in the same period last year.

The report observed that the average deal size was up 11.3% from last year to $8.02 million. Medical and healthcare sectors remained the most popular among investors with seven deals valued at $83.99 million completed. However, the Internet service sector has seen a shrinking number of deals.

Stock funds net redemption increases to Rmb17 billion in first quarter

The online edition reported that Chinese stock funds and mixed-typed funds, which were popular with investors last year, are losing investors.

China Securities Regulatory Commission observed yesterday that net redemption grew to Rmb17 billion by March 28 this year when the benchmark stock index plunged from 5,272.81 by the beginning of 2008 to 3,580.15 points.

Net fund purchases reported growth of more than Rmb 30 billion during the first quarter, with more than Rmb10 billion invested in close-end funds and 20 billion in mutual funds.

Gainers & Losers

Banks and brokerage stocks rose after investors were willing to participate in $4 billion offering of convertible notes. The offering was increased from $3 billion to $4 billion on investor demand. Swiss bank, UBS said that it hopes to complete $15 billion in rights offering by the end of June. The bank pre-announced first quarter loss of $12 billion, after losing $4.4 billion in 2007. The sharply higher loss depleted capital at the bank, however, investors bid the stock up on rights offering plan.

ICBC advanced 4.9% to HK$5.81, Bank of China climbed 3.8% to HK$3.53 and Bank of Communications grew 6.5% to HK$9.86.

China''s second-largest life insurer, Ping An advanced 5.6% to HK$58.70. HSBC gained nearly 2%. Mobile phone company China Mobile increased 3.4% at HK$121.70.

Property stocks rose on bargain hunting. Sun Hung Kai Properties increased 4.6% to HK$129.50, Sino Land rallied 8.5% to HK$18.20, Hang Lung gained 5.9% to HK$29.55 and New World Development increased 5.4% to HK$19.82.

The oil price decline lifted airlines and oil refiners for the second day in a row. Sinopec Corp rose 6.3% to HK$7.25, while Cathay Pacific gained 4.6% to HK$16.32 and Air China climbed 2.8% to HK$7.02.