Stocks in China, Hong Kong Surge

123jump.com Staff
06 Feb, 2009
New York City

Stocks in Hong Kong and in Shanghai rose sharply on the hopes that Beijing will release more funds and government stimulus to support the economy. However, Hong Kong finance chief sounded warning alarms as banks reported weak earnings in the latest quarter.

[R]6:00PM New York, 6:00PM Hong Kong - Industrial and Commercial Bank of China extends Rmb117 billion in January.[/R]

Hong Kong stock indexes gained on the hopes that the latest stimulus plan from the Beijing will help the economy to sustain economic growth.

In Hong Kong trading Hang Seng Index gained 3.6% or 476.14 to 13,655.04, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, advanced 3.3% or 242.86 to 7, 698.67. In Shanghai trading CSI 300 Index gained 4% or 86.3 to 2,237.28.

Daily turnover on main-board increased to HK$45.4 billion from HK$52 billion yesterday.

ICBC Extends Rmb117 billion in January

Industrial and Commercial Bank of China reported yesterday that it extended Rmb117.1 billion of new loans in January, which is 22% of the total amount it released in 2008.

An estimated 59% or Rmb69.3 billion was lent to infrastructure projects such as roads, power grid, railways and nuclear power stations.

Beijing is currently urging financial institutions to increase loans as part of efforts to boost domestic demand and stimulate economy.

ICBC said the moderately loose monetary policy has also helped improve profitability.

Hong Kong Chief Warns of Second Wave Financial Crisis

Xinhua News Agency reported today that Hong Hong Monetary Authority chief executive officer Joseph Yam said in his weekly column Viewpoint that there was the possibility of a “second wave” in the continuing global financial crisis.

Yam said major fourth quarter losses at big financial institutions are beyond expectations and have led to renewed concern about the severity of the crisis.

“This may have surprised some people, but I hope they will understand I was trying to alert them to developments that may affect them so that they can take appropriate preventive measures to protect themselves,” said Yam.

Gainers & Losers

Hong Kong stocks increased 4% on expectations the Chinese economy will be able to rebound early as the Industrial and Commercial Bank of China reported that loan disbursements rose. Hopes for further fiscal interventions also strengthened market sentiment.

Financial stocks increased. ICBC advanced 4.6% and China Life jumped 4%.

PCCW fell 2.9% on uncertainty over its privatization bid. China Mobile advanced 5.1%.

China Overseas Land gained 6% on expectations property transactions will pick up after the Lunar New Year.

Guangzhou R&F Properties gained 14.2%.

Esprit Holdings increased 11.7% after announcing its first profit decline in more than a decade.

Lenovo Group Ltd edged up 11% after a management reshuffle at the company where the company’s chief executive officer William Amelio stepped down in favour of founder Liu Chuanzhi and chairman Yang Yuanqing.

Geely Automobile jumped 16.7% after reporting that it expects its 2008 profit to rise on increased contribution from its car making units.

Hutchison Whampoa eased 0.7% after Husky Energy reported a 79% drop in the fourth-quarter ending December.