Shanghai Falls 4.9%, Hong Kong Drops 2.8%

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

China foreign currency reserves drop below US$1.9 trillion. Retail sale of consumer goods in China is likely to jump 21% in the year ending in December. Stocks in Hong Kong dropped 2.8% and in Shanghai plunged 4.9% on the worries that recent rate cut may not be sufficient.

[R]6:00AM New York, 6:00PM Hong Kong- China''s foreign currency reserves drop below US$1.9 trillion. Retail sale of consumer goods in China is likely to jump 21% in the year ending in December.[/R]

Hong Kong stocks fell after investors surmised that yesterday''s rate cut by China was not large enough and may need a larger rate cut in January.

In Hong Kong trading Hang Seng Index fell 2.8% or 401.60 to 14,220.79, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, plunged 5.1% or 418.40 to 7,720.02. In Shanghai trading CSI 300 Index slid 4.9% or 98.59 to 1,918.96.

Daily turnover on main-board declined to HK$32 billion from HK$36.5 billion yesterday.

China''s Forex Reserves Fall Below US$1.9 trillion

People’s Daily Online reported today that an External Debt Division of the Capital Account Management officer Cai Qiusheng said foreign exchange reserve fell below US$1.9 trillion, a first monthly decline in December since December 2003.

People''s Bank of China earlier noted that reserves rose to US$1.9 trillion at the end of September.

China''s Retail Sales Rises

Separately the online edition also reported that the Ministry of Commerce said yesterday retail sales of consumer goods rose to Rmb10 trillion by mid-December.

Government also forecasts that retail sales of consumer goods will increase by 21% from a year ago to Rmb10.8 trillion in 2008.

According to the report, MOC expect the upcoming holidays to boost the market despite the deteriorating conditions in the global financial markets.

Gainers & Losers

In Hong Kong, of the 42 stocks in Hang Seng index, 39 declined.

Shaw Brothers soared 56% to HK$12.68 after a trust controlled by Chairman Run Run Shaw will offer HK$13.35 per share. The trust controls nearly 75% of the company and stock has been suspended from trading for the last six days.

Energy stocks fell after crude oil prices dropped $4.50 to $39.90 per barrel. PetroChina declined 5.4% and CNOOC lost 4.6% as imports declined for the first time in three years in November.

Sinopec also shed 7.56%.

Hong Kong Exchanges & Clearing declined 3.8% on weak trading volumes.

Financial stocks dipped. China Construction Bank declined 4.8%, ICBC fell 2.6%, China Overseas Land & Investment slipped 4.4 % and R&F Guangzhou Properties declined 7.1%.

Insurance companies fell. China Life slid 3.8% and Ping An Insurance plummeted 6.7%. Ming Pao Daily News reported that AIG may sell a stake in its American International Assurance based in Hong Kong and explore possibility of listing on Hong Kong exchange. The paper added that China Life is interested in expanding its customer base in Asia and diversify its earnings from China to a broader geographic base.

Shipping lines dipped. China Cosco declined 11.5% and China Shipping Development lost 11.7%.