Telecom Deal, Hang Seng Up

123jump.com Staff
02 Jun, 2008
New York City

Seasonally adjusted Hong Kong dollar M1 decreased by 0.1% in April but rose by 14.6% year on year. Unadjusted Hong Kong dollar M3 expanded by 0.1% during the month and grew 10.5% from a year earlier. HKMA reported rise in surplus at the end of April by HK$1.8 billion to HK$494.8 billion.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong surpluses rise to HK$1.8 billion in the first month of the financial year.

Market sentiment

In Hong Kong trading Hang Seng Index rose 1.22% or 298.24 at 24,831.36, and the China Enterprises Index of HK-listed mainland companies, or H shares, rose 1.86% or 255.86 at 14,026.37. In Shanghai trading, CSI 300 Index gained 0.40% or 14.50 at 3,625.83.

Daily turnover on main-board declined to HK$74.3 billion from HK$85.5 billion on Friday.

Hong Kong surplus rises to HK$1.8 billion

Xinhua News Agency reported the Hong Kong Financial Services and Treasury Bureau said on Friday that a surplus of HK$1.8 billion was realized in the Hong Kong Special Administrative Region government’s first month of the current financial year. HK government's fiscal reserves increased to HK$494.8 billion.

During the month of April, HK$22.2 billion was realized in revenue, while expenditures were HK$20.4 billion, yielding a surplus of HK$1.8 billion. According to the report, total government debts were HK$20.08 billion.

HK money supply increases

Seasonally adjusted Hong Kong dollar M1 decreased by 0.1% in April but rose by 14.6% year on year. Unadjusted Hong Kong dollar M3 expanded by 0.1% during the month and grew 10.5% from a year earlier.

According to statistics published on Friday by the Hong Kong Monetary Authority, total deposits with authorized institutions increased 0.3% in April 2008. Hong Kong dollar deposits rose 0.3%, as the expansion in savings deposits exceeded the decreases in demand and time deposits.

Foreign currency deposits grew by 0.2%. In particular, renminbi deposits increased by 33.0% to RMB76.6 billion yuan at the end of April, accounting for around 3.1% of foreign currency deposits.

Total loans and advances rose by 1.6% in April. Loans for use in Hong Kong expanded by 1.6% and loans for use outside Hong Kong grew by 1.9%. With faster growth in loans relative to deposits, the Hong Kong dollar loan-to-deposit ratio picked up further to 77.4% at the end of April, compared with 76.5% at the end of March.

Hong Kong Exchange Fund assets rise to HK$1.46 trillion

Separately, the Hong Kong Monetary Authority said Friday that the Hong Kong Exchange Fund's total assets increased HK$8.1 billion from March to HK$1.46 trillion.

The HKMA said foreign-currency assets declined HK$15.8 billion and Hong Kong dollar assets rose HK$23.9 billion on valuation losses on foreign-currency investments and redemption of government debts.

In addition, the rise in Hong Kong dollar assets was due mainly to valuation gains on Hong Kong equities held by the Exchange Fund and placements received from fiscal reserve.

Statistics from the monetary authorities reveal that the Monetary Base fell 0.8% from March at HK$326.2 billion on a decrease in Certificates of Indebtedness and the market value of Exchange Fund Bills and Notes outstanding.

The Backing Assets slipped 1.2% from the previous month to HK$358.6 billion in April.

China’s residential sales drop 4% in January-April period

The People’s Daily online reported on Saturday, quoting the National Development and Reform Commission, that China’s commercial residential sales dropped 4% from a year ago to 136.6 million square meters during the January to April period from a 16.6% rise in the same period a year earlier.

The report notes that NDRC said that 84.5 million square meters of commercial residential houses in the first four months were completed, 20.2% rise from a year ago.

However, the Commission notes that real estate investment spiked 44.8% in central China and 42.6% in western China, while the eastern areas had a 26.1% rise in the period.

Real estate investment rose 32.1% from last year to Rmb 695.2 billion.

Gainers & Losers

Insurance companies China Life advanced 3% and Ping An gained 4.2%.

China Mobile rose 2.5% after losing ground last week as Beijing began rolling out the telecom restructuring program.

China Telecom, China Unicom and China Netcom were suspended from trading in Hong Kong pending an announcement of restructuring details. However, China Telecom is expected to announce its buy-out of wireless operator China Unicom's CDMA assets.

Sinopec Corp. rose 3.7% on news that the company has discovered more gas reserves in northeastern China. PetroChina and CNOOC also gained as crude oil prices for July delivery surged 0.6% to $127.35 a barrel on Friday.

China Railway Construction Corp. dropped 7.6% despite its rating being raised to “buy” by Goldman Sachs.

CLP Holdings declined 8.2% to HK$64.70 and CITIC Resources Holdings plummeted 4.1% to HK$3.99 after announcing the company will raise HK$2.5billion through an issue of 788.68 million rights shares at HK$3.2 each, as it strategically positions itself for future expansion.

Asian Markets review

In Tokyo Nikkei 225 Index closed higher 101.60 or 0.71% to 14,440.14, in Hong Kong Hang Seng index increased 298.24 or 1.22% closed to 24,831.36. In Australia ASX 200 index higher 7.60 or 0.13% to close 5,662.30. In Malaysia KL Composite index decreased 13.61 or 1.07% closed to 1,262.49.

In South Korea Kospi Index decreased 4.49 or 0.24% to close at 1,847.53, in Thailand SET index closed lower 23.43 or 2.81% to 810.22 and Indonesia JSE Index edged decreased 16.58 or 0.68% to 2,427.77. Sensex index in India decreased 352.39 or 2.15% to 16,063.18.