Energy Stocks Lead in HK, Shanghai

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

Hong Kong stock indexes gained on the heightened speculation that China will soon allow prices for oil products to increase. Traders speculated that Beijing will increase subsidies for oil refiners to cushion them from mounting losses on higher feedstock costs. In Hong Kong trading Hang Seng Index rose 1.16% or 290.83. Renminbi advanced to a level of 6.96 to one U.S. dollar.

[R]6:00AM New York, 6:00PM Hong Kong – Less than 5% of insurance claims are recoverable in the recent Sichuan earthquake.[/R]

Hong Kong stock indexes gained on the heightened speculation that China will soon allow prices for oil products to increase. Traders speculated that Beijing will increase subsidies for oil refiners to cushion them from mounting losses on higher feedstock costs.

Market sentiment

In Hong Kong trading Hang Seng Index rose 1.16% or 290.83 to 25,460.29, and the China Enterprises Index of Hong Kong-listed companies, or H shares, jumped 1.15% or 160.13 at 14,133.73. In Shanghai trading CSI 300 Index gained 1.95% or 72.23 at 3,783.05.

Daily turnover on main-board was HK$79.23 billion compared to HK$82.8 billion yesterday.

Chinese insurance companies pay Rmb18 million in earthquake claims

China Daily reported today that Chinese insurance companies have to date paid out insurance claims of Rmb18.2 million related to the recent earthquake that hit Sichuan Province in China.

The China Insurance Regulatory Commission said yesterday by May 19 insurance companies had received 103,000 claims, but it is estimated that only 5% of the more than $20 billion of damages from the quake is covered by insurance. However insurance commissioner asked to establishment a catastrophe insurance scheme to provide funding in the event of future national disasters.

“The process of the establishment of a catastrophe insurance scheme will definitely be accelerated as a result of the earthquake,” said Yuan Li, a spokesman for the China Insurance Regulatory Commission.

Taxes waived on donations for Sichuan

The Shanghai Daily reported today that the State Taxation Administration said it has cut or waived a tax levy, offered a tax refund and a tax concession on donations related to the earthquake in Sichuan. In addition, losses suffered by companies and individuals due to the earthquake will be tax deductible.

Supplies donated from overseas will be exempted from import taxes, while individuals whose tax-paid autos have been destroyed can apply for a refund of Vehicles and Vessels Usage Tax.

Chinese mainland companies combined donations of cash and goods topped Rmb4.5 billion as of yesterday.

Yuan gains

Xinhua News Agency reported today that the yuan rose to a new high today as dollar declined in the international market. According to the China Foreign Exchange Trading System, the central parity rate of the Renminbi (RMB) rose by 183 basis points from a day earlier to 6.9597 per dollar.

Gainers & Losers

Sinopec rose 10% and PetroChina increased 6.6% as crude oil reached 12th record in ten days of trading and above $130 a barrel. CNOOC, which has a limited exposure to the controls of petroleum related products prices and limited refining business, surged 5.9% on rising oil prices. Crude oil prices continue to hit new record and surged in today’s trading $2.02 to close at $129.07 a barrel yesterday.

Coal miners also climbed on the back of rising energy costs in the regional trading. Yanzhou Coal advanced 4.1%, China Coal increased 2.8% and China Shenhua gained 1.7%.

PC maker Lenovo closed up 3.1% ahead of its fourth quarter earnings to be released tomorrow.