Shanghai and HK Gain

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

Rising commodities prices in the region and a second-day rally in financial stocks lifted Hang Seng index 1.6% to 24,264. Stocks in Shanghai rose 3%. ADB, Asian Development Bank estimated Hong Kong growth of 4.5% and inflation of 3.4% in 2008. Apartment sales in shanghai were healthy in March and are expected to remain strong in the first half of the year.

[R]6:00AM New York, 6:00 PM Hong Kong – Hong Kong stocks rebounded for the second day in a row on rising commodities prices in the region and interest in banks and financial sector stocks.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index gained 1.64% or 392.20 at 24,264.63, while the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, rose 2.58% or 330.22 at 13,137.57.

In Shanghai trading CSI 300 Index rose 2.90% or 102.72 to 3,650.70.

Daily turnover on main-board was HK$91.50 billion compared with HK$114.7 billion yesterday.

The markets will be closed tomorrow for the Ching Ming holiday.

ADB forecasts Hong Kong economic growth of 4.5%

Xinhua News Agency reported today that the Asian Development Bank that Hong Kong’s economy will grow 4.5% in 2008, with an inflation rate of 3.4%.

ADB in the report Asian Development Outlook 2008 also expects domestic demand to remain strong in 2008, while merchandise exports are likely to weaken because of slower growth on the Chinese mainland, decline in the United States and a strong yuan.

Economic growth of the southern Chinese special administrative region will rise to 4.8% in 2009, with inflation declining to 2.8%.

According to the report, rising food prices and rents will drive inflation in 2008. However it notes that shortage of skilled labor and aging population were major development challenges for Hong Kong.

Property prices still high

China Daily reported today that commercial apartment sales in Shanghai rose 14% from March 17 to March 23 to 5,260.

Also the central bank''s first-quarter survey of residents in 50 Chinese cities showed that 14.6% plan to buy homes in the next quarter, a decline of 1.3% from last quarter and 1.9% year-on-year.

Of the seven big cities surveyed, Shanghai saw the most distinct percentage fall in homebuyers for the next quarter, down to a record-low 4.3%.

""Property prices in Shanghai have shown signs of recovery this month, as huge demand still exists in the city,"" Zhang Qi, an analyst at the China Real Estate Index System, said.

Separately, the National Development and Reform Commission reported that Shanghai property prices were stable in February from January and up 9.8% from 2007.

Gainers & Losers

Financial and realty stocks advanced after private report on employment in private sector showed that companies added 8,000 jobs in March, when economists were expecting a decline. Separately the Fed chairman Bernanke said that the U.S. economy may shrink in the first half of this year and conditions for the economy are likely to improve in the second half of this year.

Ping An Insurance Co Ltd rose 7.4% to HK$63.05 after it concluding a deal with Belgian-Dutch financial group Fortis to set up a tie-up in global asset management. China Life also jumped 4.23% at HK$29.60.

Bank of Communications gained 2% to HK$10.06 and China Construction Bank rose 3.33% to HK$6.52.

Properties gained as well. Sun Hung Kai Properties climbed nearly 2.9% to HK$133.20, Sino Land increased 3.85% to HK$18.90 and China Overseas Land gained 4.05% to HK$15.40.

CNOOC advanced 2.7% at HK$12.22 and PetroChina gained 2.35% to HK$10.44 after crude oil prices rose by $4 yesterday on rising demand.

However, Air China declined 3.4% to HK$6.78 on profit taking and rising crude oil prices.

China Shipping edged up 9.3% to HK$3.53 after net earnings jumped four-fold to Rmb3.2 billion.

Zijin Mining Group jumped nearly 4.7% to HK$7.17 as it obtained final regulatory approval to launch a Shanghai initial public offering next week.

Merrill Lynch to expand in China

Xinhua News Agency also reported that Merrill Lynch Chief Executive Officer John Thain said the broker will expand in China.

“Sixty percent of our revenues are already generated overseas and we see the best growth opportunities in those rapidly growing economies in the world, such as in India, Russia, China, Brazil, in the Middle East, these are rapidly growing economies. There is a great need of capital, these are also creation of great wealth, (and) our ability to provide wealth management expertise is particularly valuable”, said Thain.

Merrill Lynch is expected to report a large asset write-down related to leveraged loans and subprime housing loans in the first quarter of 2008.