HK Economic Growth Slows

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

Hong Kong economy expanded at 4.2% in the second quarter after rising at 7.3% in the first quarter. The government maintained the annual growth outlook at between 4% and 5% after expanding at 6.4% in 2007. The economy contracted at 1.4% in the second quarter when compared to the first quarter. U.S. led economic slowdown and a fall in consumer spending on the island dragged the economy to the slowest pace of expansion in the last five years.

[R]6:00AM New York, 6:00PM Hong Kong - China’s urban fixed assets investment rises 27.3% to Rmb7.2 trillion in first seven months.[/R]

Stocks in Hong Kong fell on declining oil and metal prices and the deteriorating health of the global economy.

Market Sentiment

In Hong Kong trading Hang Seng Index fell 1.09% or 232.13 to 21,160.58, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, plummeted 0.72% or 81.41 to 11,170.20. In Shanghai trading CSI 300 Index rose 0.17% or 4.10 to 2,447.62.

Daily turnover on main-board was HK$49 billion compared with HK$61.1 billion yesterday.

China Development Bank, PTA Sign US$50 million Agreement

Xinhua News Agency reported on its Web site today that China Development Bank and PTA Bank yesterday signed an agreement through which the latter will access a US$50 million line of credit for supporting sectors such as mining, telecommunication and infrastructure in PTA Bank’s member states.

According to the president of PTA, Michael Gondwe, credit line from the development bank is one of the largest that PTA Bank has ever received from a single institution. Gondwe added that funds will be used to support the telecommunications sector.

“This funding will support the bank''s regional business support strategy, especially in sectors that require a large amount of funding such as mining, telecommunications and infrastructure,"" said Gondwe.

Currently PTA Bank, which is also referred to as the East and Southern Africa Trade Development Bank, has 19 shareholders, 17 of whom are African states in the eastern and southern Africa.

China Urban Fixed Assets Investment Rise to 27.3%

The National Bureau of Statistics reported on its Web site today that China’s urban fixed investment increased by 27.3% to Rmb7.216 trillion in the first seven months of the year, reflecting a rise of 0.5 percentage points higher than the first half figures and 0.7 percentage points more than the comparable period last year.

During the period, investment in the real estate sector grew 30.9% to Rmb1.58 trillion, which is 2.6 percentage points lower than the first half.

The growth rate in the primary sector that includes farming, fishing and forestry was the fastest among the three major sectors in the period under review, rising 61.9%, while the secondary and tertiary sector stood at 27.9% and 26% respectively.

Also investment in projects authorized by the central government advanced by 25.3% in the first seven months from the same period last year.

Gainers & Losers

Oil producer CNOOC declined 4.3% as oil prices fell to $114 per barrel, while gold producer Zijin Mining slumped 6.9% after the price of gold dipped 3%, falling below $800 per ounce for the first time since December 2007.

Foxconn International Holdings slipped 9.4% to HK$7.87 as worries over the health of the global economy persisted.

Hong Kong Exchanges & Clearing declined 0.8% after the 28% jump in interim profit was overshadowed by a 6% fall in second quarter profit. Hutchison Whampoa gained 2 % after Citigroup projected the company will record net profit of HK$6.99 billion for the first half.

China Mobile slipped 1.4% after Morgan Stanley removed the stock from its Global Emerging Markets Equity Strategy focus list.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 62.61 or 0.48% to 13,019.41, Hang Seng index in Hong Kong decreased 232.13 or 1.09% closed to 21,160.58. ASX 200 index in Australia increased 0.60 or 0.01% to close 4,981.70. The KL Composite index in Malaysia decreased 14.38 or 1.30% closed to 1,095.05.

SET index in Thailand closed higher 1.88 or 0.27% to 707.48 and JSE Index in Indonesia decreased 21.49 or 1.02% to 2,085.15. Market of South Korea and India were closed today.