Hang Seng Recovers, Yanzhou Earnings Soar

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

Stocks in Hong Kong surged 3.5% after investors raced to cover recent short sales. Profits from Yanzhou Coal and China Construction helped the sentiment in Hong Kong and in Shanghai. Market index in Shanghai edged up a fraction. China Construction profit soared 71% and net at Yanzhou Coal surged 160% on higher coal prices in export sales. Corporate income tax collection in Chia fell 4.2% in July.

[R]6:00AM New York, 6:00PM Hong Kong- China’s tax revenues increase 13.8% to Rmb532.325 billion in July. China Construction Bank profit rose 71% and Yanzhou Coal net surged 160%.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index rose 3.50% or 712.73 to 21,104.79, and the China Enterprises Index advanced 3.74% or 407.75 to 11,324.25. In Shanghai trading CSI 300 Index shed 0.18% or 4.38 to 2,400.55.

Daily turnover on main-board was HK$55.6 billion from HK$55.7 billion on Thursday last week.

Total Tax Revenue Rise 13.8% in July

The Ministry of Finance reported on its Web site on Friday last week that China’s revenue on corporate income fell 4.2% to Rmb149.635 billion in July from the same period a year ago.

Corporate earnings slid on slowing corporate earnings. The profits at major enterprises nationwide rose 20.8% on the year between January and May, reflecting a 21.1 percentage points drop from a year ago.

Profits at petrochemical and power companies fell 79% and at nonferrous metal and oil companies declined 17.95% and 16.26 % respectively. Also, tax revenue gained 13.8% to Rmb532.325 billion nationwide in July, but growth was 19.3 percentage points lower than the year-earlier level.

China LNG Imports Fall 13.4%

The General Administration of Customs said China’s import of liquefied petroleum gas and other hydrocarbon gases slid 13.4% to 2.8 million tons in the January to June period a year ago. Guangdong was the leading importer, with 80% share of the total LPG imports.

Of the total imports 46% or 1.288 million tons were from Australia and 27.8% or 781,000 tons were from the United Arab Emirates, Kuwait and Saudi Arabia. LPG was priced at Rmb7, 600 per ton abroad on average, which is Rmb 800 higher than the domestic price.

Gainers & Losers

Stocks in Hong Kong rose on bargain hunting and short covering following a market drop on Thursday last week on waning expectations that Beijing will launch an economic stimulus package.

Maanshan Iron & Steel fell 7.8% after Goldman Sachs cut the stock to “sell” from “buy” on speculation that demand for steel will decline. Angang Steel also tumbled 0.8% on a downgrade by Goldman Sachs.

Financial stocks rose on solid earnings growth. China Construction Bank gained 3.7% as profit rose 71%. HSBC upgraded rating on the stock to “neutral” from “underweight”. ICBC edged up 4.3% on a 41% rise in second quarter profit.

HSBC Holdings increased 3.1% and China Mobile jumped 3.6%.

Sinopec Corp surged 3% after crude oil prices for October delivery fell the most in four years, dropping 5.4% to $114.59 a barrel, Petrochina climbed 3.1% and CNOOC rose 4.3% as a result.

Yanzhou Coal Mining jumped 5.8% after the company reported yesterday that interim net income increased 160%, China Shenhua Energy rose 5.4% and China Coal Energy soared 6.4%. Hutchison Whampoa surged 2.9% on a strong earnings growth buoyed by improved performance at Husky Energy that benefited from rising oil prices. And the parent company Cheung Kong Holdings rose 3.7% as interim profit declined less-than-forecasted.

Cathay Pacific Airways advanced 5.2% on falling oil prices. China Life edged up 3.2 % and China Unicom jumped 4.4%. China Netcom increased 4.2% as first half profit dropped than a lower-than-projected 5.2.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 212.62 or 1.68% to 12,878.66, , Hang Seng index in Hong Kong increased 712.73 or 3.50% closed to 21,104.79.ASX 200 index in Australia increased 83.50 or 1.69% to close 5,014.90. The KL Composite index in Malaysia decreased 6.87 or 0.63% closed to 1,078.73.

The Kospi Index in South Korea increased 5.20 or 0.35% to close at 1,502.11, SET index in Thailand closed lower 3.73 or 0.55% to 678.20 and JSE Index in Indonesia increased 6.73 or 0.32% to 2,127.22. The Sensex index in India increased 48.86 or 0.34% closed to 14,450.35.