Weekly Gains in HK and Shanghai

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

Stocks in Hong Kong edged lower today but surged 5.5% for the week. In Shanghai trading stocks rose 0.8% and for the week soared 16%. The reduction in stamp duty on trading in China lifted stocks for the second day in a row. Citic Securities, Haitong Securities and China Vanke led gainers in the CSI 300 index. Air China gained 4% after it reported 147% rise in earnings. Yunnan Copper full year profit declined 47% in 2007. Bao Steel is looking to raise $8.5 in international offering.

[R]6:00AM New York, 6:00PM Hong Kong - Hang Seng edged lower today but advances 5.5% for the week.

In Hong Kong trading Hang Seng Index plummeted 0.64% or 164.00 at 25,5416.78, rising 5.5% for the week, and the China Enterprises Index of the Hong Kong listed mainland companies, or H shares, slipped 1.35% or 194.86 at 14, 221.62.

In Shanghai trading, CSI 300 Index rose 0.76% or 28.57 to 3,803.07.

Daily turnover on main-board dropped HK$93.6 billion from HK$130.3 billion yesterday.

Hong Kong second quarter prospects brighter

The Hong Kong Census and Statistics Department reported today that the outlook for business in the second quarter is brighter than in the first, especially for the manufacturing, import and export trade, transport and related services and business-services sectors.

According to the department''s Quarterly Business Tendency Survey, 34% of respondents forecast a better outlook while only 8% expected it to be worse.

Industries also expect a rise in their volume of business, especially in the manufacturing, import and export trade, transport and related services, communications, business services, banks, financing and insurance sectors.

In addition, those in the wholesale and retail, restaurants and hotel, real estate, banks, financing and insurance sectors forecast a rise in employment in the second quarter.

Respondents in other sectors- except the banks, financing and insurance sector- expect selling prices and service charges to increase, particularly in the manufacturing, wholesale and retail, restaurants and hotels sectors.

Airbus to form JV in China

China Daily online reported today that Airbus expects to launch a joint venture in China to make aircraft components. Airbus expects to use the joint venture to produce composite material parts for its Airbus A350 model and compete with Boeing.

Airbus said yesterday China will need some 2,800 new passenger aircraft and freighters from 2007 to 2026, with a total market value of $329 billion.

President of Airbus China Laurence Barron said, “We are studying the possibility of setting up the venture with AVIC II (China Aviation Industry Corporation II) and expect to finalize the deal as early as August.”

The report notes that the European company targets to reach 50% market share by 2011 from the current 38% of China''s aircraft market.

Gainers & Losers

Hong Kong stocks fell on profit taking from the recent gainers.

Zijin Mining declined 4% to HK$7.61 after gold hit a three-week low overnight and the Shanghai exchange temporarily suspended the stock, which more than tripled its offering price. Gold yesterday fell to below $900 per ounce as the dollar gained.

Port operator China Merchants shed 5.1%.

Aviation stocks increased as crude oil traded below $116 a barrel. Cathay Pacific Airways increased 4.8% and Air China gained 2% after reporting a more than two-fold jump in first-quarter earnings on a stronger yuan and good traffic growth.

China Unicom dropped 4.5% after reporting yesterday a lower-than-forecasted 1.5% increase in first quarter profits.

Ping An Insurance fell 1.58%, while China Life was relatively flat ahead of its earnings results.