Hong Kong Stocks Drop 2.8%

123jump.com Staff
12 Jan, 2009
New York City

Stocks in Hong Kong fell and in Shanghai edged higher as business climate deteriorated. The latest survey in China indicated weakening confidence and a decline in business activities across all industrial sectors. Casino stocks rebounded after the expected travel visa restrictions were not imposed.

[R]6:00AM New York, 6:00PM Hong Kong - Chinese banks grant Rmb740 billion loans in December. China’s business climate index falls to 107 in Q4.[/R]

In Hong Kong trading Hang Seng Index fell 2.8% or 406.44 to 13,971.00, and the China Enterprises Index of Hong Kong listed mainland shares slipped 5.3% or 412.58 to 7,311.23. In Shanghai trading CSI 300 Index rose 0.1% or 2.32 to 1,920.69.

Daily turnover on main-board edged higher to HK$46.3 billion compared with HK$45.2 billion on Friday last week.

Chinese Banks Grant Rmb740 billion Loans in December

Shanghai Securities News reported today that loans granted by Chinese banks increased to Rmb740 billion in December on an easing monetary policy and initiatives that were taken by Beijing to boost economic growth.

The report noted that outstanding loans soared 19% from a year ago to Rmb30 trillion.

Xinhua News Agency also said China Banking Regulatory Commission (CBRC) said on Saturday that small and medium sized banks will be given more room in lending.

China’s financial institutions extended Rmb1.3 trillion more loans from 2007 to Rmb4.9 trillion.

China’s Business Climate Index Falls to 107 in Q4

National Bureau of Statistics reported that China’s business climate index eased to 107 in the fourth quarter 2008 from 128.6 in the previous quarter.

However a reading above 100 indicates economic expansion, which a reading below 100 shows contraction.

According to the report, the index for industry lost 27.3 points from the previous quarter to 98.5, while the indices for wholesalers declined 16.4 points and retailers by 17.2 and property developers fell to 10.7 in that order.

The index for domestic publicly traded companies fell 39.4 points to 106.2 and the entrepreneurial confidence index shed 29.2 points to 94.6.

China’s Realty Prices Drop 0.4% in December

China Daily reported today that a survey conducted by the National Development and Reform Commission (NDRC) showed that urban house prices declined by 0.4% in December from the same period a year ago and dropped 0.5% from November.

The NDRC indicated that prices of low-cost housing rose 0.6% in December compared to a year earlier period and average price of high-end residential apartments slipped 1.1%.

The price of average residential houses fell 0.9%.

Gainers & Losers

Hong Kong stocks fell to a five-week low as investors fretted on news that the U.S. unemployment rate increased 7.2% in December.

The U.S. Labor Department reported on Friday last week that the country’s unemployment rate rose 7.2% in December as employers shed 572,000 jobs. In addition the average work week in the review period dropped to the lowest since 1964 to 33.3 hours. Cumulatively the economy lost 2.6 million jobs in 2008 sparking fears of further slowdown in Chinese exports.

China Eastern Airlines plunged 7.1% to HK$1.04 after reporting that that it forecasts a loss of Rmb6.2 billion for fiscal 2008 on slowing traffic and losses on fuel price hedging contracts.

Other airliners fell. Air China declined 9.2% and China Southern Airlines slipped 6.7%.

PetroChina dropped 4.8% after crude oil prices fell $1.6 to $40.8 per barrel, heightening fears that energy demand will fall this year.

Coal stocks shed. China Shenhua tumbled 4.7% and China Coal Energy plummeted 7.5%.

Aluminum Corp of China fell 8% and China Shipping Development tumbled 13.3%.

Galaxy Entertainment climbed down 19.4% after Macau failed to announce any change to visa restrictions that was widely anticipated following the visit by Chinese Vice President Xi Jinping.

Melco International Development shed 12.4% and SJM Holdings declined 10.2%.