Hong Kong, Shanghai Rise; Hibor Falls

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

Hong Kong and Shanghai market indexes surged on the hopes that the U.S. president-elect Barack Obama will revive the economic growth and exports from China may not decline next year. Manufacturing index in China declined in October from September. Interbank rates in Hong Kong fell to 2.55%.

[R]6:00AM New York, 6:00PM Hong Kong – Stocks in China and Hong Kong rose after the U.S. election results. Interbank rates fell.[/R]

Stocks in Hong Kong rose after the U.S. Presidential election results. The president-elect Barack Obama is expected to revive federal spending and pull out the U.S. army from Iraq. Investors hope that the U.S. economy may revive faster under his administration. Voters associated the current economic malaise and mess in Iraq with the deeply unpopular President Bush and Republican Party.

Crude oil prices surged more than 10% after Saudi Arabia announced production cut. However, lingering recession fears pared gains.

In Hong Kong trading Hang Seng Index gained 3.1% or 455.82 to 14,840.16, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, soared 5.3% or 364.81 to 7,225.69. In Shanghai trading CSI 300 Index advanced 3.9% or 63.66 to 1,691.42.

Daily turnover on main board turnover rose to HK$63.4 billion compared with HK$45.3 billion yesterday.

China''s Purchase Management Index Drops to 44.6% in October

Xinhua News Agency reported that China Federation of Logistics and Purchasing said the Purchase Management Index (PMI) of China''s manufacturing sector declined by 6.6 percentage points from the previous month to 44.6% in October. The index below 50 reflects a decline in activities. The survey was based on 700 manufacturers.


The report noted that all but two of the 11 sub-indices showed a worrying drop in October, with figures indicating purchase prices and production falling 12.4% and 10.3% respectively.

New orders fell 9.6% to 41.7% in October, while new orders for export stood at 41.4%.
In addition, the product stock index rose to 50%.

“A falling new order index shows a sinking social demand, while the drop in the output index signals the growth of the manufacturing sector is slowing down,"""" said the report.

According to the report, declining demand and production has negatively affected the country''s employment.

Of the 20 industries involved in the PMI, 16 reported an employment index below 50%, with the index of the labor-intensive textile industry falling to 47.6% and the garment industry employment index declined to 48.4 %.

Hibor Falls to 2.55%

The Hong Kong Association of Banks reported the three-month interbank rate declined 24 basis points to 2.55%.

Also the Hong Kong Monetary Authority added HK$814 million to the banking system yesterday to boost liquidity in the market.

Gainers & Losers

Industrial and Commercial Bank of China rose 3.7% and China Construction Bank also increased 5.5% after brokerage BNP Paribas upgraded the sector to “neutral” from “underweight”.

BOC Hong Kong increased 17.2% to HK$9.70.

China Life soared 3.4% and Ping An Insurance surged 7.8%.

PCCW gained 27% after the largest shareholder Richard Li led a $2 billion buyout offer and take the company private.

PetroChina edged up 4.3% and Sinopec Corp increased 5.3% after crude oil prices for December delivery climbed 10% to $70.53 per barrel.

CNOOC rose 5.8% as well.

China Shenhua Energy surged 3.5%.

Realty stocks also fell as interbank rates eased. China Overseas Land Investment jumped 9.5% and China Resources Land increased 8%.