Shnaghai Stocks Surge 5%

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

China and the U.S. decided to review investment criteria for both and within two countries as China looks for ways to allocate its growing foreign exchange reserve. The reserve of $1.5 trillion and growing is also losing its purchasing power as dollar declines in the international currency markets and investment barriers in the U.S. restricts the investment options.

[R]6:00AM New York, 6:00PM Hong Kong – Agriculture products prices fall a fraction.[/R]

Hong Kong stocks rose trekking gains in mainland stocks after stocks in Shanghai surged from a decline in the last two weeks of trading and dropped as low as 50% from the peak.

China and the U.S. look for ways to develop a framework of investment and reduce investment barriers. China has accumulated more than $1.5 trillion of foreign exchange and Chinese companies are generally finding difficulty in investing large projects in the U.S.

Chinese authorities are worried that falling dollar reduces China’s purchasing power in countries linked to euro and barriers to Chinese investment in the U.S. in private sector and government controlled properties limits the options of it can do with such a large reserve. The rising reserves are also inflationary in China.

In Hong Kong trading Hang Seng Index rose 1.16% or 267.81 at 23,325.80, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, advanced 2.08% or 261.30 at 12,829.33. In Shanghai trading CSI 300 Index spiked 5.23% or 148.60 at 2,991.27.

Daily turnover on main-board was HK$71.21 billion from HK$48.26 yesterday.

Agricultural prices slide 0.6%

Ministry of Commerce latest data on agricultural prices slipped 0.6% between June 9 and 15 from a week earlier.

Statistics from a farm produce price survey in 36 medium and large cities nationwide also showed that 35 agriculture products declined in price of the total 58 products and 18 increased in price and prices for five were unchanged.

Although vegetable prices declined 5.4% from a week ago across the nation, the prices in southern cities such as Shenzhen, Guangdong Province, and Xiamen, Fujian Province.

Wholesale prices of pork and mutton fell 0.3% and 0.03% respectively, and beef prices climbed 0.2%. The price of small-packaged flour prices jumped 0.2% week on week.

In addition, fruit prices slumped 0.2% week on week for seasonal reasons.

China’s fixed assets investment rises 25.6%

The People’s Daily Online reported today China''s fixed-assets investment in the first five months gained 25.6% year-on-year to Rmb 4.026 trillion, while investment in real estate edged up 31.9% at Rmb 951.9 billion from the same period a year earlier.

According to the report, the National Statistics Bureau of China released figures on Monday that indicated that by the end of May a total of Rmb 2.72 trillion has been planned for investment in newly-initiated projects.

Investment in coal mining between January and May advanced 47% and in the non-ferrous metal mining and dressing, smelting and rolling processing industry grew by 41.5%.

Gainers & Losers

Sinopec spiked 7.8% on easing crude oil prices and expectations that Beijing will lift the freeze on prices of petroleum products before the beginning of the Olympics. Other energy stocks also gained as well. Petrochina climbed 3.5%, CNOOC edged up 1.2% and Sinopec Shanghai Petrochemical increased 4.9%.

Financial stocks were also propped up by rising mainland shares. China Life gained 1.6%, Ping An Insurance spiked 3.1% percent and ICBC rose 1.6%. China Mobile increased 0.9%.

Sun Hung Kai Properties surged 3.6% after Goldman Sachs upgraded the stock to “buy” from “neutral”.

Sinotrans Ltd added 5.1% on news that Sinotrans Group is mooting a tie-up with China Yangtze Transportation Corp. Sinotrans Shipping Ltd climbed 2.8% as well.

Asian markets review

In Tokyo Nikkei 225 Index closed higher 104.45 or 0.73% to 14,452.82, in Hong Kong Hang Seng index increased 267.81 or 1.16% closed to 23,325.80. In Australia ASX 200 index higher 20.50 or 0.38% to close 5,443.20. In Malaysia KL Composite index decreased 15.17 or 1.24% closed to 1,212.59.

In South Korea Kospi Index increased 23.42 or 1.34% to close at 1,774.13, in Thailand SET index closed lower 11.43 or 1.47% to 765.74 and Indonesia JSE Index edged decreased 13.40 or 0.56% to 2,364.58. Sensex index in India decreased 274.59 or 1.75% to 15,422.31.