HK Battles Recession Worries

123jump.com Staff
04 Nov, 2008
New York City

Hong Kong October home sales dropped 17.8% from September and plunged 54% from a year ago. Energy stocks fell on a decline in oil price in the region. Mining stocks dropped after Baosteel lowered its production target for December.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong home sales fell 17.8% in October.[/R]

In Hong Kong trading Hang Seng Index rose 0.3% or 39.97 to 14,384.34, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 0.8% or 54.55 to 6,860.88. In Shanghai trading CSI 300 Index fell 1.6% or 25.78 to 1,627.76.

Daily turnover on main board was HK$45.3 billion from HK$52.1 billion yesterday.

Home Sales Fall 17.8% in October

The Land Registry in Hong Kong reported today that the total number of sale and purchase agreements for building units fell 17.8% from the previous month and 54.2% from a year ago to 6,054 units in October.

Also the total consideration of the agreements for the month declined 19.6% from a month earlier and 62.6% from a year ago to HK$18.9 billion.

Of the 6,054 sale and purchase agreements, 4,719 were agreements for residential units, reflecting a fall of 58.1% from a year ago.

The total consideration of these agreements in the month was HK$16.3 billion, dropping 13.1% from September 2008 and 62.9% from October 2007.

Sales of residential units refer to the sale and purchase agreements with payment of stamp duty and do not include sales of units under the Home Ownership Scheme, the Private Sector Participation Scheme and the Tenants Purchase Scheme except those after payment of premium.

Hong Kong Recession Risk Mounts

Hong Kong chief executive Donald Tsang said yesterday after the TaskForce on Economic Challenges the present financial crisis and economic slowdown has increased the risk of slipping into a recession in 2009.

According to Tsang, the financial services, tourism, trading and real estate sectors will be hardest hit and measures will be taken to cushion them from the financial turbulence.

Gainers & Losers

Hong Kong stocks fell after the energy stocks led the decliners on oil prices dropped below $64 a barrel.

CNOOC fell 5.6% and PetroChina declined 2.5%.

China Railway Construction fell 18.5% after reporting that its railway project in Nigeria had been temporarily suspended by the Nigerian government.

Hang Seng Bank rose 7.2% after keeping its third-quarter dividend unchanged at HK$1.10 per share. Goldman Sachs also upgraded the stock to “buy” from “neutral”.

China Construction Bank jumped 4.7%, ICBC rose 2.2% but China Citic Bank surged 14%.

Realty stocks gained. China Overseas Land soared 3.9%, China Resources Land gained 4%.

Commodity stocks slipped as Baosteel Group slashed its output in December. Angang Steel fell 8.7% but Xinjiang Xinxin Mining gained 10% after saying it will buy three nickel-copper mines in Xinjiang Uygur Autonmous Region.

CITIC Resources gained 7.4% after announcing yesterday that it plans to have a private placement for CITIC Australia Trading by offering A$0.75 per share to raise A$15.1 million.