Hong Kong Trading and Index Declines

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

Stocks in Hong Kong fell in shrinking trading on the worries that exports from the region are likely to remain low for this and next year. Stocks in Shanghai gained 2% on the expectations that China will provide financial assistance. Bank of East Asia and Sumitomo Mitsui in a regional venture.

[R]6:00AM New York, 6:00PM Hang Seng – Stocks in Hong Kong fell on shrinking trading volume but in Shanghai rose on the government support for airlines.[/R]

In Hong Kong trading Hang Seng Index fell 1% or 13.13 to 13,529.53, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 0.8% or 53.55 to 6,968.09. In Shanghai trading CSI 300 Index rose 2.2% or 43.57 to 1,987.22.

Daily turnover on main board declined to HK$39.8 billion compared with HK$44.7 billion on Friday last week.

China Eastern Airlines, China Southern to Get Rmb3 billion

Shanghai Securities News reported today that the holding companies of China Southern Airlines and China Eastern Airlines will get Rmb3 billion each to cushion them from slowing demand and high fuel costs.

China Eastern had Rmb 2.3 billion loss in the first three quarters of the year and Air China lost Rmb 657 million in the period.

China to Increase Tax Rebates on Exports of Plates and Strips

Bloomberg News reported today that China''s Ministry of Finance announced today that the country will increase tax rebates by 13% on exports of rebates on exports and strips in December to buttress economic growth.

Analysts say the intervention will allow aluminum to be more competitive.

On Friday last week Beijing also said it will revoke export taxes on steel products such as hot-rolled coils and plates, large sections and alloy strips and wires.

Gainers & Losers

Hong Kong stocks decline 1% as the outlook for global economic growth weakened after Japan slipped into a recession.

Foxconn International Holdings, which makes handsets for Nokia and Motorola plunged 11.3% after Nokia lowered industry wide sales forecast for the year and projected weaker sales in 2009.

Hong Kong Exchanges & Clearing fell 7.6% as equities continue to underperform and after Morgan Stanley slashed its price target to HK$38 from HK$75.

The investment bank also forecasts that the bourse''s daily trading volume is likely to fall to HK$47 billion from HK$50 billion.

Airlines bucked the downtrend after they sought financial assistance from the government. China Southern Airlines rose 12%, China Eastern Airlines advanced 7.6% and Air China jumped 2.5%.

CITIC Pacific increased 3.1% despite reports that the company doesn''t have plans to sell its assets to shore its capital base.

Wing Hang Bank shed 4.5% after announcing on Friday that it will make a full provision for HK$377 million bonds in New Zealand dollar, euro and U.S. dollar.

Bank of East Asia gained 3.2% after reporting it will form a tie- up with Japanese bank Sumitomo Mitsui Banking Corp to expand in China, Hong Kong and Japan.