China Stocks Rise

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

Stocks in Hong Kong rose 3.3% and in Shanghai gained 1.7% on higher trading volume. The HKMA reported that foreign exchange reserve declined in October to $155 billion from $160 billion. Banks and real estate companies increased. Hong Kong Exchange dropped on broker comments.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong foreign currency reserves drop to US$155 billion by October. Stocks in Hong Kong gained 3.3% and in Shanghai increased 1.7%.[/R]

In Hong Kong trading Hang Seng Index rose 3.3% or 453.4 to 14,243.43, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, increased 3% or 195.09 to 6,794.59. In Shanghai trading CSI 300 Index gained 1.7% or 28.05 to 1,677.83.

Daily turnover on main board increased to HK$48.8 billion from HK$48.3 billion yesterday.

Hong Kong Reserves Ease to US$155 billion

Hong Kong Monetary Authority reported today that its official foreign currency reserve assets fell to US$155 billion by the end of October from US$160.6 billion at the end of September.

Foreign reserves, including forward contracts, stood at US$155.3 billion by the end of the review period.

Hong Kong is the ninth largest holder of foreign currency reserves after mainland China, Japan, Russia, Taiwan, India, Korea, Brazil and Singapore.

The HKMA notes that the total foreign currency reserve assets of US$154.9 billion are seven times more than the currency in circulation.

Separately, the monetary authorities yesterday refined to fifth of the fives measures that were introduced to the market on September 30 to provide liquidity into the market, especially on the longer term of the interbank loans.

The maximum tenor of the of the collateralized term lending will be extended from one month to three months, while interest rates for such lending will be determined by market interest rates.

Yuan Rises

The yuan rose to a two-month high of 6.8255 against the dollar from 6.8250 yesterday and rose 0.2% this week. Currency traders believe that Chinese authorities are supporting the currency to stem the outflow of foreign exchange.

Gainers & Losers

China Construction Bank advanced 5%, ICBC gained 3% and HSBC increased 1.3%.

China Mobile jumped 3.6%.

Sun Hung Kai Properties advanced 6.2% on the expectations that the reduction of interest rates by lenders will boost property developers.

Cheung Kong (Holdings) also increased 5.3%.

Hong Kong Exchanges and Clearing dropped 1.6% after Credit Suisse lowered its target price to HK$65 from HK$90 and lowered its profit estimated for 2009 by 12%.

Lenovo Group Ltd tumbled 12% after profit in the quarter ended September fell 78% from the comparable period a year ago.

CNOOC bucked the downtrend in energy stocks rising 3.3% after it announced that the turmoil on the financial markets has not affected its access to cash for investment or demand for its product.

PetroChina gained 2.5% as well.

Li & Fung dropped 3% on falling demand in the U.S. and a rising yuan.