Realty Stocks Fall in Hong Kong

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

Stocks in Hong Kong fell but in Shanghai rose on trading volume below average level last year. Earlier stock dropped as much as 2% on the higher mortgage rates. Realty stocks fell sharply but banks rose.

[R]6:00PM New York, 6:00PM Hong Kong - Realty stocks drags Hang Seng index.[/R]

In Hong Kong trading Hang Seng Index fell 0.6% or 78.88 to 13,509.78, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, shed 0.1% or 5.35 to 7,227.19. In Shanghai trading CSI 300 Index rose 1.6% or 30.36 to 1,982.93.

Daily turnover on main-board rose to $39.9 billion from HK$38.0 billion yesterday.

GM, Chrysler Consider Pre-Arranged Bankruptcy

General Motors Corp and Chrysler LLC may have to agree on pre-arranged bankruptcy to get a bailout from the government if it exhausts all options currently available.

Staff for three members of Congress has reportedly asked restructuring experts if a pre-arranged bankruptcy that is negotiated with workers, creditors and lenders can be used to restructure the industry without arranging for liquidation.

The U.S. three biggest automakers- General Motors, Chrysler LLC and Ford Motors- are seeking a $34 billion bailout in loans and credit lines to weather the deteriorating conditions. The $34 billion is not going to be sufficient to save these companies, most analysts believe that three companies may need more than $100 billion and will be back asking for money.

Gainers & Losers

Hong Kong stocks indexes traded in negative territory after erasing a 2% advance in the morning session as investors worried about the increases in mortgage rates.

Bank of China and HSBC raised their mortgage rates by between 50 and 75 basis points early this week. Realty stocks fell.

Investors were further unnerved by news that Credit Suisse has a net loss of $2.5 billion by the end of November and will be cutting 5,300 jobs.

Cheung Kong Holdings fell 3.4%, Henderson Land dropped 2.5% and Sun Hung Kai Properties shed 1.2% after financial institutions led by HBSC and Bank of China increased mortgage rates.

Financial stocks rose on speculation that Beijing will slash its reserve requirement on deposits in order to boost growth. The State Council yesterday committed to implement measures to steady the stock market and increase the supply of credit

ICBC gained 1.8% and rival China Construction Bank increased 2.1%. China Life Insurance gained 1.2 %, Ping An Insurance advanced 5.4% and PICC P&C jumped 10.2%.

Telecommunication also rose. China Mobile increased 1.6%, China Unicom gained 1.6% and China Telecom edged up 4.1%.

i-Cable Communications dropped 7.7 % after the company reported yesterday that its largest shareholder will not proceed with its possible privatization proposal.

City Telecom climbed 16% after the Hong Kong telecom service provider reported today that chairman Ricky Wong has assumed the helm of ATV.