HK Stocks Decline, Shanghai Up

123jump.com Staff
05 May, 2008
New York City

China permitted more companies to open investment management operations, however the companies remained cautious. April consumer price inflation in China is expected to be near 8%, lower than in March and February. Angang Steel jumped 4% on the reports that Arcelor Mittal and Angang are in discussions to explore merger or stake sale. Retailer Maoye International fell below its offering price of HK$3.10 on its first day of trading.

[R]6:00AM New York, 6:00PM Hong Kong- China’s April consumer price index is expected to decline to 8% rise, but still above the inflation target of 4.8%.[/R]

Hong Kong Stock indexes traded in negative territory led by China Mobile and on speculation that new rules to allow more funds into Hong Kong are unlikely to have an impact in the short-term.

In Hong Kong trading Hang Seng Index dropped 0.22% or 57.07 at 26,183.95, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, slumped 0.04 % or 5.87 at 14,625.28.

In Shanghai trading, CSI 300 Index rose 2.44% or 96.66 at 4,055.78.

Daily turnover on main-board was HK$74.03 billion compared to HK$89.1 billion on Friday last week.

Consumer prices keep rising

Consumer prices are expected to rise in April at or above 8% after CPI rose 8.3% in March and 8.7% in February. In the first quarter the inflation index increased 8% in the first quarter and inflation in the second quarter may decline but is likely to remain between 6% and 8%.

Chief Economist with the National Bureau of Statistics Yao Jingyuan in an interview with the China Central Television said that inflation is likely to remain above the target rate of 4.8% for the year 2008.

Price of pork, corn, wheat, rice and crude oil have risen between 45% and 110% in the last two years.


Gainers & Losers

Beijing said yesterday it has relaxed rules governing investment fund management companies and allow more companies to set up operations in Hong Kong.

Alibaba.com Ltd declined 5.9% after Microsoft Corp withdrew its bid for Yahoo Inc. Yahoo is the one of the largest investors in the online marketplace.

Retailer Maoye International Holdings Ltd declined as much as 5.8% below its offering price of HK$3.10 in its trading debut on Monday to close at HK$3.04. The company raised $343 million in its public offering.

Homebuilders Cheung Kong increased 1.8% and Sun Hung Kai Properties advanced 1.3%.

Mobile carrier China Unicom reversed from an earlier gain of 3% before closing up 0.8% on reports chairman Chang Xiaobing may join China Mobile as part of China telecommunications sector restructuring.

Angang Steel jumped 4% on reports Arcelor Mittal is in talks with the company to form a possible tie-up or take an outright stake in the company.

Air China rose 4.3% to HK$6.54 as oil prices slowed to $116 per barrel. China Eastern increased as much as 7.5% and China Southern gained 2.9% to HK$5.70 as well.

Asian markets review

In Hong Kong Hang Seng index decreased 57.07 or 0.22% closed to 26,183.95. In Australia ASX 200 index higher 29.90 or 0.52% to close 5,730.30. In Malaysia KL Composite index increased 3.13 or 0.25% closed to 1,274.61.

In Indonesia JSE Index edged increased 45.23 or 1.93% to 2,387.99. Sensex index in India decreased 109.22 or 0.62% to 17,490.90. Market in Japan, South Korea and Thailand were closed today.