Falling Crude Dampens HK Stocks

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

In Shanghai trading CSI 300 Index rose 2.80% or 100.03 at 3, 676.23. Daily turnover on main-board was HK$60.21 billion compared with HK$54.49 billion yesterday. Wing Lung Bank lost 3.5% to HK$144.40, the most in two months. The former vice chairman of the Standing Committee of the National Peoples Congress Cheng Siwei said at a three-day forum on economic globalization in Shanghai today that China economy can maintain a steady growth above 8% for a relatively long period.

[R]6:00AM New York, 6:00PM Hong Kong - Declining crude oil prices dampen Hong Kong stocks.[/R]

In Hong Kong trading the Hang Seng Index fell 0.13% or 32.53 at 24,249.51, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, rose 0.34% or 44.66 at 13,374.74.

In Shanghai trading CSI 300 Index rose 2.80% or 100.03 at 3, 676.23.

Daily turnover on main-board was HK$60.21 billion compared with HK$54.49 billion yesterday.

China’s economy can maintain 8% growth in the long-term

Shanghai Daily reported that economist and former vice chairman of the Standing Committee of the National People''s Congress Cheng Siwei said at a three-day forum on economic globalization in Shanghai today that China economy can maintain a steady growth above 8%percent for a relatively long period.

Cheng added that critically China has a stable society, a vast market and ample capital as foreign reserves have topped US$1.68 trillion.

""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""Social stability is crucial to economic development while China has a market of 1.3 billion people, which creates a huge consumption power,"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" said Cheng.

However, Cheng pointed out that the chasm between the rich and poor presents significant challenges, with the income of urban residents tripling that of rural households while the purchasing power in cities was four times larger than that in rural areas.

He believes that China''s per capita GDP can reach US$3,000 by 2010, US$5,000 by 2020 and US$10,000 by 2049, given its economic expansion and a stronger yuan.

Quake to hurt property market

The China Daily reported today that according to Beijing based real estate research and advisory firm BrilliantStone the “psychological shadow” over the economic losses in Sichuan and Chongqing caused by May 12 earthquake will sap out enthusiasm for the property market in the area.

Separately, R&F Properties President Zhang Li said the same report the earthquake could shave Rmb100 million to Rmb200 million off the company''s business but will not change its 24 billion yuan sales target this year.

Gainers & Losers

Airlines rose after the price of crude oil declined by $4 to $128 a barrel yesterday. Air China rose 2.57% to HK$5.59 and Cathay Pacific jumped 3.06% to HK$15.50.

However CNOOC Ltd fell 5.08%.

Also Hutchison Whampoa rose 2.62% to HK$84.15.

Exporters also gained on encouraging consumer and business sentiment in the US. Li & Fung rose 3.17% to HK$30.95 as improved sentiment about consumer and business spending boosted shares of consumer-related companies such as

Wing Hang Bank gained 5% to HK$111.00 on speculation China Life wants a stake in the bank.

Also GOME Electrical Appliances Holding Ltd increased 5.14% to HK$4.50 after Credit Suisse upgraded the stock to “neutral” from “underperform” as first quarter profit grew.

Company news

Bank of America to increase stake in China Commercial Bank

Xinhua News Agecy reported today that China Construction Bank announced yesterday that the Bank of America will exercise its call option and buy 6 billion Hong Kong-listed CBC shares from Huijin at about HK$2.42 per share.

The transaction will reduce Huijin''s CCB stake to 65.4%, and increase Bank of America''s share to 10.75%, or 25.1 billion H-shares.

Bank of America plans to finish the transaction on June 5,under an agreement it signed in 2005 with Central Huijin Investment.

http://english.people.com.cn/90001/90776/90884/6419557.html