Ping An Drops 10%, Beijing Airport Net Down 90%

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

Hong Kong stocks fell as credit markets weaken in the U.S. and Europe. Ping An will increase its provision for losses after Fortis drops to another low on liquidity concerns. Beijing Airport net income drops 90% on a rise in operating costs and fewer passenger traffic.

[R]6:00AM New York, 6:00PM Hong Kong – The U.S. market jitters dragged indexes lower in Hong Kong but China purchase supported indexes in Shanghai.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index fell 1.33% or 252.34 to 18,682.09, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, slipped 1.80% or 175.51 to 9,589.01. In Shanghai trading CSI 300 Index gained 0.91% or 20.12 to 2,243.66.

Daily turnover on main-board was HK$55 billion compared with HK$52.2 billion at mid-day yesterday.

Chinese Premier Urges Joint Efforts for Global Stability

Xinhua News Agency reported on its Web site today that Chinese Premier Wen Jiabao is advocating for joint international efforts to ensure global financial stability.

Wen noted that economic and trade ties between China and the U.S. has led to huge benefits to both sides and added that it was paramount for the two countries to promote dialogue and cooperation, especially during these times when the world economy is facing mounting challenges.

He also urged U.S. to recognize China''s full market economy status and relax controls on high-tech exports to address the trade imbalance between the two countries.

JP Morgan Buys Washington Mutual

Washington Mutual, the 120-years old savings bank was seized by the Federal regulators and its assets and branch network was sold in an auction to JP Morgan Chase.

The bank has lost more than $6 billion in the last three quarters in a row and recently raised $7.2 billion and replaced its longtime chief executive. However, persistent falling home prices and seized credit markets forced WaMu to seek more capital when markets are avoiding investments in banks. Depositors sensing problems at the bank accelerated their account closures in the last ten days forcing the Federal regulators to step in to prevent a bank failure.

Washington Mutual, with $304 billion in assets faced a bank run that started on September 15. In the last ten days depositors withdrew $16.7 billion.

Gainers & Losers

Ping An Insurance declined 9.7% to HK$47.50 on market rumors that Fortis, in which it holds 5% equity, has sought the assistance of another lender Rabobank to boost liquidity. Ping An, in a statement to the Hong Kong Stock Exchange said it will increase it loan loss provision after Fortis AG dropped 6% in Brussels trading. Ping An has declined more than 40% in Hong Kong and 70% in Shanghai trading.

China Mobile declined 3.2% on concern that the regulatory regime is tilted in favour of small rivals.

However, China Unicom edged up 0.7% and China Netcom rose 0.6%.

China Cosco slipped 11.3% after the Baltic Dry Index plunged 7.3% on slowing global demand for commodities.

Airlines declined on falling crude oil prices. Air China soared 1.4% and China Southern Airlines gained 4.7% as a result.

Earnings Review

Beijing Capital International Airport Company reported first half profit decline of 90% after weather delays and a rise in operating costs.

The airport operator reported sales rise of 21% to 2 billion yuan or $285 million. The net income dropped to 56.3 million yuan or $8.2 million or 0.01 yuan a share from 566.7 million yuan or $82 million or 0.14 yuan a share.

The airport handled 199,830 aircrafts, 0.7% fewer aircrafts in the period from a year ago but total of 26 million passengers passed, an increase of 0.4%. Freight throughput increased 28.4% from a year ago to 638 million metric tons.

As at 30 June 2008, there were 79 airlines operating at the Beijing Airport, including 19 domestic airlines, 5 Hong Kong and Macau airlines, and 55 foreign airlines.

At present, the Beijing Airport is operating with three runways and three terminals. Its designed passenger handling capacity has been expanded from 35 million to 78 million per annum, and its designed freight handling capacity has been expanded from 0.78 million tons to 1.80 million tons per annum.