Stocks in China, HK Rise, Weak Economic Outlook

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

Hong and China are facing sharply lower economic growths in the current year and economy to be at its weakest in the first half of this year. China is expected to grow at 8.3% in the current fiscal year but exports are likely to fall 6.5% and imports are expected to decline 4.6%.

[R]6:00AM New York, 6:00PM Hong Kong - China''s economy expected to rise 8.3% in 2009.[/R]

In Hong Kong trading Hang Seng Index increased 0.6% or 84.48 to 13,339.99, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 1.4% or 98.81 to 7,246.15. In Shanghai trading CSI 300 Index advanced 1.1% or 22.25 to 2,012.46.

Daily turnover on main-board declined to HK$37.9 billion HK$47.1 billion on Friday last week.

HK Forecasts Negative Growth in the First Two Quarters

Xinhua News Agency reported today that chief executive officer of the Hong Kong Special Administrative Region Donald Tsang said today Hong Kong forecasts negative economic growth in the last quarter of 2008 and in the first two quarters of 2009.

The report notes that Tsang said recovery in the latter part of 2009 will depend on the how the economy will respond the various stimulus package that have been unveiled.

The impact of the global financial crisis has however been lesser than in the U.S. and Europe.

According to the report, trade between Hong Kong and Guangdong province increased to US$140 billion in 2007.

China Economic Growth of 8.3%

China''s Academy of Sciences reported today that it forecasts that the country''s gross domestic product will increase 8.3% in 2009.

The CAS said China''s economic slowdown will be most severe in the first half of the year. The economy is also predicted to recover early due to the Rmb4 billion economic stimulus package that was unveiled by the government last year.

Primary, secondary and tertiary industries are forecasted to gain 5%, 9.8% and 4.6% respectively.

Exports growth is expected to decline 6.5% and imports are projected to decline 4.6%.

China to Establish Rmb10 billion Renewable Energy Fund

The China Daily Online reported today that China New Energy Chamber of Commerce said it will establish Rmb10 billion renewable energy fund.

The funds raised will be channeled to small and medium sized enterprises engaged in China''s booming renewable energy industry.

The CNEC plans to raise Rmb1.2 billion in the next two years.

Gainers & Losers

Hong Kong stocks traded in positive territory after being dragged by weaknesses in HSBC in the morning session.

Investors were however cautious ahead of the inauguration of U.S. President-elect Barack Obama tomorrow and uncertainty over the health of the financial services sector.

HSBC fell 3% to HK$62.3 as the stock continued to be weighed by downgrades from Morgan Stanley and Goldman Sachs yesterday.

Commodity stocks rose. Aluminum Corp of China Ltd soared 9.5% after raising spot alumina prices.

Financial stocks gained. ICBC edged up 0.3% and China Construction Bank advanced 0.77%.

Energy stocks rose as crude oil prices gained to $36 a barrel. Cnooc jumped 2.3% to HK$6.79 and PetroChina Co. climbed 1% to HK$6.18.

Utilities rose after Beijing said it will set up a Rmb10 billion renewable energy fund. Datang rose 5.4% and China Power International Development climbed 2.9%.