Hong Kong Surges 14%, Shanghai Up 3.1%

123jump.com Staff
28 Oct, 2008
New York City

Stocks in Hong Kong surged 14% in a largest one day rally in 11 years. The Hang Seng index had dropped 28% in the last five sessions. Cathay Pacific and China Railways surged 30% after crude oil weakened in the region. In Shanghai trading CSI 300 Index soared 3.1%.

[R]6:00AM New York, 6:00PM Hong Kong - Hang Seng Index soars 14% in largest one day gain 11 years.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index gained 14.3% or 1,580.45 to 12,596.29, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, advanced 13.9% or 692.98 to 5,683.06. In Shanghai trading CSI 300 Index soared 3.1% or 51.15 to 1,705.82.

Daily turnover on main-board was HK$66.1 billion from HK$56.8 billion yesterday.

Accommodation and Catering Sales Rise 24.8%

China''s Ministry of Commerce reported that the country''s accommodation and catering industry gained 24.8% to Rmb1.11 trillion in the nine months ended September 30.

Sales in the January to September period account for 14.2% of the nation''s total domestic retail sales in the period.

Retail sales of consumer goods rose 22% to Rmb7.79 trillion in the period buoyed by the 2008 Beijing Olympic Games in the third quarter.

Foreign companies established 506 new hotels and restaurants in China during the January-September period, while the actual use of foreign capital in accommodation and catering industry fell 4.5% from a year ago to US$720 million.

Accommodation and retail sales rose 26.3% to Rmb384.81 billion in the quarter to September.

MOC forecasts that retail sales for the industry will rise to Rmb1.54 trillion this year.

Gainers & Losers

Hong Kong stocks rose the most in 11 years after bargain hunters searched for values after a five-day drop of 28%.

Kowloon Development Co Ltd plunged 41.7% after it estimated HK$3.7 billion in losses from financial investments in the first ten months of the year. Goldman Sachs slashed Kowloon Development to """"sell"""" from """"buy"""".

HSBC climbed 20%. Bank of East Asia jumped 10.2% despite cautioning yesterday that its annual profit will fall as HSBC upgraded the stock to """"overweight"""" from """"neutral"""".

China Life gained 13.9% after JP Morgan upgraded the stock to “overweight” from “neutral” after the insurer reported yesterday that profit in the third quarter dropped 70%.

Financial stocks rose as well. ICBC climbed 16.4% and the China Construction Bank increased 23.3%.

Cathay Pacific gained 30.1% after UBS upgraded the stock to """"buy"""".

Earnings Review

Property developer Vanke reported on its Web site that third quarter profit in the period ended September 30 declined 13.4% to Rmb215 million from a year ago on 31.9% decline in property sales.

Vanke said house prices and sales are falling on a gloomy outlook and weak future incomes expectations.

The company has since cut new home construction plans 16% to 5.7 million square meters floor space.