inflation Worries Drag China Stocks

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

Stocks in Shanghai and Hong Kong fell on the continued worries related to elevated inflation in the region. However, China reported that non-performing loans fell to 5.8% of all assets, lower than 6.2% at the end of the last year. Fixed asset investment increased 26% in the first four months compared to a year ago period. Separately, software services outsourcing from China rose to $10 billion in 2007.

[R]6:00AM New York, 6:00PM Hong Kong - China’s first quarter non-performing loans falls to 5.8% of all assets and fixed asset investment increases 26%.[/R]

Stocks in Hong Kong fell trekking trading in Shanghai on renewed inflation worries in China.

In Hong Kong trading the Hang Seng Index fell 0.08% or 19.77 at 25,513.71, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, rose 0.34 % or 47.31 at 14,027.55. In Shanghai trading CSI 300 Index fell 0.70% or 27.69 at 3,948.09.

Daily turnover on main-board turnover was HK$80.2 billion compared with HK$67.92 billion yesterday.

China’s non-performing loans fall 5.8% in first quarter

The China Banking and Regulatory Commission reported today that the non-performing loans (NPL) ratio of Chinese commercial banks declined to 5.8%, a record low. The ratio was 0.38 percentage points lower than the previous low of 6.2% at the end of last year.

CBRC’s non-performing loans at all commercial banks fell by Rmb22.78 billion from the end of last year to Rmb1.2 trillion. According to the Commission, total assets of the banking sector rose 20.8% by the end of March from the same period a year earlier to Rmb55.5 trillion.

More than half of all assets or Rmb29.9 trillion were registered with the state-owned commercial banks, which saw a 15.2% increase in assets.

China’s fixed asset investment increase 25.7% to Rmb2.8 trillion

The National Bureau of Statistics reported today that China''s urban fixed-asset investment rose 25.7% from a year ago to 2.841 trillion yuan in the first four months of 2008, representing 0.2 percentage points rise over the same period of last year.

China’s software and IT industry records Rmb580 billion in 2007

People’s Daily Online reported that it was revealed at a recent conference on service outsourcing held by the Ministry of Commerce that the scale of China''s software and IT industry rose to Rmb580 billion in 2007 and exports of software services rose to $10 billion in the year 2007.

Gainers & Losers

Hutchison rose 5.51% to HK$83.30 after Citigroup upgraded the sock to “buy” from “hold” and raised its price target to HK$90 from HK$82 on speculation the 3G business will record significant earnings. Tencent Holdings gained 7.9% to HK$69.85 after Citigroup raised its target price for the company to HK$75 from HK$63.

PetroChina increased 2.2% to HK$11.14 after saying it has managed to restore a third of the quake-affected gas production.

In addition, the Bank of East Asia increased 3.39% to HK$45.70 after Goldman Sachs upgraded the lender to “buy” from “neutral”, on the strength of the new debit card business in China.

China Mobile fell 0.3% and China Life declined 0.6%.