Stocks in HK, Shanghai Slide, Yearly Lows

123jump.com Staff
05 Sep, 2008
New York City

Stocks in Hong Kong and Shanghai fell sharply tracking losses in European and the U.S. markets. Benchmark indexe in Shanghai dropped 3% and for the year declined 58% and dropped 63% from its peak in October. Stock index in Hong Kong fell 2.2% and dropped 27% for the year so far and 35% from its peak in October last year. Property stocks declined after Goldman Sachs downgraded the sector.

[R]6:00AM New York, 6:00PM Hong Kong - China to float Rmb 26 billion of bonds with 1-year maturity.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index fell 2.24% or 456.20 to 19.933.28, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 2.10% or 229.05 to 10,695.86. In Shanghai trading CSI 300 Index dropped 3.01% or 67.71 to 2,183.43. The index in Shanghai has fallen 58% for the year so far and declined 63% from the peak in October 2007.

Daily turnover on main-board was HK$65.3 billion compared with HK$56.5 billion yesterday.

China’s inflation is expected to cool to between 5.1% and 5.5% in August after rising at 6.3% in July and 7.1% in June and 7.7% in May. The recent price controls are easy inflation.

China to Float Rmb 26 billion of Bonds

The Ministry of Finance said today it will float Rmb25.99 billion or $3.8 billion treasury bonds, bringing the year to date bonds offering to Rmb423 billion. The one-year bonds have a fixed interest rate of 3.34% and will be issued between September 8 and 10 to trade on Sept 12.

The finance ministry plans to accept bids for bonds on September 12 valued at Rmb 26 billion and with a final date of offering on Sept 18.

Gainers & Losers

Property stocks were the main drag on today’s trading as Goldman Sachs downgraded the sector from “neutral” to “cautious” after considering a narrowing in primary market price premiums over secondary market prices.

Sun Hung Kai Properties fell 6.1% as Goldman Sachs slashed the stock to “neutral” from “buy”, and Henderson Land lost 6.2% after the same brokerage cut the stock to “sell” from “neutral”. Cheung Kong Holdings also declined 5.7%.

HSBC Holdings slid 3.3% on news that the unemployment rate unexpectedly increased in August.

Oil prices remained below $108 per barrel and PetroChina slumped 2.6%. CLP Holdings advanced 2.9% and Hong Kong Electric rose 1.2%. Retailer Espirit Holdings gained 1.9%, after Merrill Lynch raised its rating on the stock to “buy” from “underperform”.

China Communications Constructions also dipped 4.5%.