Stocks in Shanghai Surge, Hong Kong Edges Higher

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

Stocks in Shanghai surged and in Hong Kong edged higher after a steady rise in commodities prices. Commodities and stocks linked to the industry maintained their momentum on the hopes that the government stimulus will sustain the demand.

[R]6:00AM New York, 6:00PM Hong Kong - China in currency swap arrangements with Malaysia. Beijing’s business climate index eases to 108.9 points in Q4.[/R]

Hong Kong stock indexes rose driven by gains in mainland stocks on expectation China''s demand for raw materials is likely to rebound. Stocks linked to commodities increased.

Shipping line operators gained after the Baltic Freight Index surged 10%, a rise for the thirteen days in a row.

Gains were limited after the U.S. postponed the announcement of a financial sector rescue plan to tomorrow.

In Hong Kong trading Hang Seng Index gained 0.8% or 114.02 to 13,769.06, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, advanced 0.7% or 55.90 to 7,754.57.

In Shanghai trading CSI 300 index soared 2.7% or 59.39 to 2,296.67.

Daily turnover on main-board declined to HK$24.5 billion compared with HK$23.2 billion on Friday last week

U.S. Postpones Banking Reform Plan to Tomorrow

The U.S. Treasury has postponed the announcement of the Economic Stability and Recovery Plan to tomorrow. The U.S. Senate is expected to vote on the economic stimulus plan.

Director of the National Economic Council Lawrence Summers said yesterday competing House and Senate versions of the plan are 90% in agreement.

Summers added that Geithner''s plan emphasizes the need to bring stability to the financial services sector and to facilitate the flow of credit.

China Signs Currency Swap Arrangement with Malaysia

Peoples Bank of China reported today that it has signed a currency swap arrangement with Bank Negara Malaysia that will allow the two central banks to swap Rmb80 billion or 40 billion Ringgit in three years.

The arrangement can be extended and is tailored to promote bilateral trade and economic development.

Beijing’s Business Climate Index Falls in Q4

Beijing’s Municipal Bureau of Statistics reported yesterday that Beijing business climate index fell to 108.9 points in the three months to December, falling the most since 2003.

The index for industry was 92 points in the December quarter from 135.9 in the previous month and the index for the entrepreneurial confidence index contracted to 85.5 points, the lowest in 10 years.

The index was weighed by the global financial crisis, the government’s macro-control measures and the Olympic Games.

A reading above 100 shows expansion, while a reading below 100 indicates contraction.

Gainers & Losers

Aluminum Corp of China known as Chalco increased 6.9% to HK$4.36 after Goldman Sachs upgraded the stock to ""buy"" from ""neutral"" and added the stock to its conviction buy list on hopes the country''s rapid urbanization and industrialization will boost demand.

Hutchison Whampoa added 3.1% to HK$39.45 after announcing its Australia business unit will form a tie-up with the Vodafone to compete with Telstra Corp and Optus.

Shipping lines increased as the Baltic Dry Index, which measures freight charges of raw materials, gained 10%. China Cosco soared 3.3%.

Commodity stocks also increased on speculation the country''s demand for raw materials in rebounding. Shenhua Energy advanced 2.3% and Jiangxi Copper rallied 6.9%.

China Merchants Holdings rose 4.7% to HK$15.70 after acquiring 25 million B shares in Shenzhen Chiwan Wharf Holdings, shoring its stake to 8%.

Credit Suisse also raised the company''s target price to HK$ HK$21.90 from HK$21.40.