Hong Kong Fails to Join Market Gains in Asia

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

Shares in Hong Kong missed to capitalize on gains across Asian exchanges as pessimism prevailed due to tensions in the Middle East. Chinese authorities, meanwhile, unveiled a plan to create 9 millions jobs in urban areas through a number of initiatives in 2009.

[R]6:00AM New York, 6:00PM Hong Kong- China to create 9 million jobs in urban districts in 2009.[/R]

Market Sentiment

In Hong Kong the Hang Seng Index fell 0.7% or 92.98 to 14,235.50, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 0.2% or 11.59 to 7,786.19. In Shanghai trading CSI 300 Index shed 1.2% or 21.32 to 1,833.44.

Daily turnover on main-board was HK$26.3 billion from HK$21.95 billion yesterday.

Hong Kong shares will close for the New Year holiday at midday on Wednesday.

China’s Foreign-Exchange Reserves to Fall in H1 2009

Xinhua News Agency reported today that Moody’s Economy.com said China’s foreign exchange reserves might fall in the first half of next year as a halt in the yen’s appreciation causes a flight of capital out of the country.

China has slowed the yuan’s advance to 0.1% in the second half of the year after the 6.6% increase in the first half of the year adversely affected exporters.

Beijing ended a dollar link in July 2005.

Moody’s said, “A large chunk of speculative capital would have already gone in the current quarter as it’s clear to market watchers that the government doesn’t want to appreciate the yuan any more. Other speculators will gradually move out next year after losing confidence.”

China’s foreign currency reserves topped $1.9 trillion at the end of third quarter.

China to Create 9 million Jobs in Urban Districts

Separately, the online report said Human Resources and Social Security Minister Yin Weimin said yesterday the country will create 9 million new jobs in urban districts in 2009.

The registered urban unemployment rate will also be kept under 4.6% next year.

Unemployed migrant workers returning home are being encouraged to start businesses and the government has pledged to assist with credit extensions, tax breaks, business registration and information consulting service.

Gainers & Losers

Hong Kong market averages fell despite the increase in commodity stocks on increased tensions in the Middle East.

China Eastern Airlines declined 8.5% after the company announced yesterday that it will receive a Rmb7 billion capital injection from Rmb3 billion expected to be obtained through a share placement.

China Southern Airlines fell 9% and Air China shed 1.7%.

CNOOC surged 4.4% after crude oil prices soared $2.31 to $40 per barrel on fears oil supplies could be disrupted by the conflict between Hamas and Israel.

PetroChina gained 2% and China Shenhua Energy edged up 2.7%.

ICBC declined 1.5% and Bank of China plunged 1.4% on speculation earnings will slow at Chinese banks in 2009.