China CPI Up 4%, Alibaba.com Soars 10%

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

The Producers Price Index in China rises to 6.6% in October and CPI increased to 4%. Alibaba.com reported higher than expected earnings lifting the stocks 10%. Third quarter net rose 49%. Stocks in Hong Kong fell 0.7% and in Shanghai declined 1.2%. Li & Fung surges 11% on an outsourcing order.

[R]2:30PM New York, 3:30AM Hong Kong – The Producers Price Index in China rises to 6.6% in October and CPI increased to 4%. Alibaba.com reported higher than expected earnings lifting the stocks 10%.[/R]

In Hong Kong trading Hang Seng Index fell 0.7% or 101.81 to 13,939.09, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 0.03% or 2.38 to 7,134.54. In Shanghai trading CSI 300 rose 1.2% or 20.46 to 1,801.82.

Daily turnover on main board stood at HK$47.2 billion from HK$54.4 billion yesterday.

Producer Prices Rise 6.6% in October

The National Bureau of Statistics in China reported that the country’s producer price index of manufactured goods increased 6.6% in October from a year earlier as purchasing prices for raw materials, fuels and power gained 11%.

Producer prices for the mining and quarrying industry gained 22.7%, while the raw material and machining industry soared 9% and 5.1% respectively.

The index for foodstuffs soared 5.4% and that for clothing and commodities increased by 2.6% and 3.6% correspondingly. The PPI index or crude oil gained 11.3%, with gasoline rising 31.7%, diesel increasing 19.5% and kerosene jumping 36.3%.

Also the index for mining and washing of coal industry climbed 41.1% in the review period, while the index for crude coal advanced 40.6%.

The NBS said prices for smelting of ferrous metal gained 15.3% from the comparable period a year ago.

The index for smelting and pressing of nonferrous metals declined 9.8% as aluminium, copper, lead and zinc fell 7.5%, 16.9%, 22.7% and 39.7% in that order.

In the January to October period the producer price index rose 8.2% and the purchasing price for raw materials, fuels and power products soared 12.2%.

China’s CPI Rises 4% in October

Separately, the NBS said the consumer price index increased 4% in October from a year ago. In urban areas the index rose 3.7% and gained 4.6% in rural areas.

From January to October the CPI gained 6.7% year-on-year.

Prices of foodstuff, consumable and services climbed 8.5%, 1.6% and 4.9% respectively. Poultry prices and its processed products gained 6.7% and the price of tobacco and liquor increased 3.4% from last year.

The price of clothing dropped 1.3% but the price of household services, maintenance and renovations edged up 1.6%. Western medicine prices rose 1.4% and traditional Chinese medicinal materials and medicines soared 3.9%. However prices of transportation and communication remained stable.

Gainers & Losers

In a volatile trading in Hong Kong stocks closed higher on positive earnings outlook from Alibaba.com and after the apparel manufacturer Li & Fung signed an outsourcing agreement from overseas.

Realty stocks fell. Sun Hung Kai Properties fell 4%, Hang Lung Properties declined 2.8% and Cheung Kong plunged 3.7%.

Li & Fung surged 11.6%.

Yue Yuen Industrial Holdings gained 7.5% and Foxconn International Holdings increased 5%.

Hutchison Telecommunications International Ltd increased 11.4% after it announced bigger-than-forecasted special dividend.

Alibaba.com advanced 9.4% after the company’s board approved a plan to stock purchase plan of $258 million.

China Shenhua Enery declined 1.3% after crude oil prices plummeted $3.08 to $59.3 per barrel.

China Merchants Holdings declined 6% after JP Morgan lowered the price target on the stock to HK$16.50 from HK$24.00 and cut its earnings forecast by 24% for 2009.

Vitar International gained 10.5% after it issued 28 million new shares at HK$2.1 each.

Tsingtao Brewery edged up 6.3% and China Huiyuan Juice Group increased 2.8%.

Earnings Review

Alibaba.com Limited third quarter revenues rose 37% to Rmb 780.2 million from Rmb 570.5 million a year earlier. Net profit in the quarter grew 49% to Rmb 308.6 million or HK$ 6.96 cents per diluted share or HK$ 4.43 cents per share, a year earlier.

Alibaba.com Limited, in the last one year traded as high as HK$ 41.80 in November 2007 and as low as HK$ 3.46 in October 2008. Based on the yesterday’s closing price the company has a market cap of HK$ 27.13 billion.