HK Lowers Rates; Chalco, Henderson Rise

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

Hong Kong Monetary Authority lowered its key lending rate to 0.5% following the rate cut in the U.S. Stocks rose after a rally in banks and realty sectors. State owned companies in China reported revenue rise of 20% in the first eleven months but profits declined 26% on weak energy sector.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong cuts rates to 0.5% following the rate cuts in the U.S. State revenues rise 20.2% to Rmb10.7 trillion.[/R]

Hong Kong stocks rose led by realty stocks after the Hong Kong Monetary Authority cut its base rate in line with record cut by the U.S. Federal Reserve.

In Hong Kong trading CSI 300 Index rose 2.2% or 330.31 to 15,460.52, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 3.8% or 308.51 to 8.372.26. In Shanghai trading CSI 300 Index edged up 0.4% or 6.97 to 2,001.42.

Daily turnover on main-board surged to HK $56.4 billion from HK$40.3 billion yesterday.

HK Cuts its Base rate to 0.5%

Hong Kong Monetary Authority today lowered its base rate to 0.5% after the U.S. Federal Reserve yesterday cut its key rate to between zero and 0.25%.

According to a new formula announced in October, the base rate is set 50 basis points above the prevailing U.S. federal funds target rate.

The U.S. Federal Open Market Committee yesterday decided to set a target range of federal funds between zero and 0.25%. The Fed also indicated that it will start buying mortgage securities and look beyond providing liquidity to the financial markets.

The Fed noted in an accompanying statement that financial markets “remain quite strained and credit conditions tight” and it is prepared to keep rates low as long as necessary.

State Owned Enterprises Revenues Rise 20.2%

Peoples’ Daily Online reported today that State-owned Assets Supervision and Administration Commission of the State Council revenues rose 20.2% to Rmb10.7 trillion in the first 11 months of the year.

According to the report of all the SOEs, 119 enterprises have realized year-on-year revenue increases, accounting for 83.2% of the total enterprises.

However, combined profits declined 26% to Rmb683.04 billion. Excluding petrol and power companies SOEs'' profits only dropped 3%.

Gainers & Losers

Retailer Esprit fell 8.2% after Goldman Sachs downgraded the stock.

Realty stocks also gained on interest rate cuts Sun Hung Kai Properties rose 4% and Henderson Land soared 7.8%.

Hong Kong Electric fell 3.3% following a larger-than-expected 5.9% tariff cut from the beginning of next year.

China National Building Materials jumped 14% on expectations that the company will benefit from lower interest rates.

Aluminum Corp of China rose 13.5% and CNOOC advanced 7.4%. PICC P&C declined 5.3%.

China Unicom gained 4.2% after undertaking to buy all the fixed line assets of its parent group and China Netcom for $940 million. China Mobile increased 3.3%.