Yunnan Pledge Lifts Stocks in China

123jump.com Staff
01 Dec, 2008
New York City

Manufacturing in China declined according to the latest survey of 700 manufacturers. Yunnan regional government plans to spend $3 billion to purchase base metal prodcution from local companies to support activities. The pledge lifted stocks in the sector and in Hong Kong.

[R]10:00AM New York, 10:00PM Hong Kong – Manufacturing activity in China declined according to the latest survey. Yunnan province plans to buy 1 million tons of base metals to support local manufacturers.[/R]

In Hong Kong trading Hang Seng Index increased 1.6% or 220.60 to 14,108.84, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 2.6% or 184.21 to 7,391.69. In Shanghai the CSI 300 Index soared 1.9% or 34.28 to 1,864.20.

Daily turnover on main-board increased to HK$43.9 billion from HK$42.4 billion last week.

PMI Falls 38.8% in November

Xinhua News Agency reported that China Federation of Logistics and Purchasing said today the Purchasing Managers'' Index of China''s manufacturing sector declined 5.8 percentage points from October to 38.8% in November, the weakest since 2005.

The index measuring new orders fell 9.4 percentage points from the previous month to 32.3% in November, while new orders for export dropped 12.4 percentage points from a month ago to 29%.

A measure below 50 shows economic contraction, while a reading above 50 shows economic expansion. The survey included 700 manufacturers.

Yunnan Province to buy 1 million tons to Help Smelters

China’s Ministry of Land Resources reported today that Yunnan province to purchase 1 million tons worth an estimated $3 billion of base metals to help smelters in the region to cope with weak demand and low prices.

Yunnan will buy 150,000 tons of copper, 300,000 tons of aluminium, 150,000 tons of lead, 300,000 tons of zinc and 100,000 tons of tin.

In addition, the provincial government has encouraged companies to buy reserves of iron ore and copper concentrates at low prices.

Yunnan province harbors Yunnan Copper, Yunnan Aluminium, Yunnan Tin, Luoping Zinc and Chihong Zinc.

Gainers & Losers

Hong Kong stocks gained buoyed by rising metal stocks after the ministry of land and resources reported that the country’s Yunnan Province will build a stockpile of copper, aluminum and other base metals.

Jiangxi Copper gained 8.2%, Aluminun Corp of China soared 4.5% and Maanshan Iron climbed 8.3%.

Property stocks also increased after Sun Hung Kai announced today that the company has sold 200 units in the Peak One residential development in Shatin at HK$7,300 to 7,500 a square foot and 300 units at La Grove project in Yuen Long. The stock closed up 1.5%.

Sino Land edged up 7.7%, China Overseas Land rallied 9.6%, R&F Properties rose 12.8% and China Resources Land soared 9.7%.

China Mobile also gained 2.3% and Foxconn International Holdings increased 8.5%.

ICBC advanced 4 % and China Construction Bank gained 4.7%.

Hong Kong Exchanges & Clearing increased 4.9% on speculation that the stock market will extend from last week’s gain.

TVB dropped 2.8% on news that the company plans to cut 212 employees.