Stocks In Hong Kong Fall Ahead of Budget

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

Ahead of the budget speech in Hong Kong, the benchmark index of stocks declined 2.9%. Consumer price index in January rose at 3.1% compared to a year ago. HSBC, China Life and Manulife declined on the weakness in financial stocks.

[R]6:00AM New York, 6:00PMHong Kong - Hong Kong consumer price index rises 3.1% in January.[/R]

Hong Kong market averages slipped despite expectations that tomorrow’s budget speech is likely to unveil supportive measures for growth.

In Hong Kong trading Hang Seng Index declined 2.9% or 376.58 to 12,798.52, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, shed 3.3% or 238.80 to 7,068.21. In Shanghai trading CSI 300 Index dropped 4.5% or 108.63 to 2,301.85.

Daily turnover on main-board declined to HK$37 billion from HK$39.6 billion yesterday.

Hong Kong Consumer Prices Rise 3.1% in January

Census and Statistics department of Hong Kong reported today that consumer prices rose 3.1% in January from the same period a year earlier.

Netting out the effects of all government intervention measures, the year-on-year rate of increase in the Composite CPI in January 2009 declined to 4.5% from 4.6% the previous month due to a smaller increase in private housing rentals and decrease in basic electricity charges.

In the period food prices rose 11.2% in the composite consumer price index, with rice gaining 39.6%, fresh-water fish 27.9%, poultry 26.1%, salt-water fish 23.4%, canned meat 22% and eggs 20.6%.

However, prices fell for electricity, gas and water by 42%; durable goods 3.2% and alcoholic drinks and tobacco 0.9%.

HK Service Industries to Benefit from China Stimulus

Xinhua News Agency reported that Hong Kong Trade Development Council said yesterday service sectors will benefit from the Rmb4 trillion stimulus package that was unveiled by China.

The council said Hong Kong’s expertise in real estate development, infrastructure construction, environmental protection, exhibitions and logistics are crucial for service suppliers on the mainland.

According to the report, Hong Kong services sectors are allowed to establish wholly owned enterprises to provide construction and related services on the mainland under the Close Economic Partnership Arrangement.

In addition, CEPA allows Hong Kong services providers in the environmental protection industry to operate as wholly owned enterprises on the mainland to provide a range of environmental protection and related services.

Gainers & Losers

Utility stocks rose as investors sought a hedge from declining market conditions. Hong Kong Electric increased 3.2% to HK$48.50.

HSBC dropped 3% on worries that earnings will drop more-than-forecasted on depressed performance in both the U.S. and Hong Kong.

Commodity-related stocks fell as crude oil prices slipped 4.14% to $38.40 per barrel. PetroChina dropped 3.7% to HK$5.71 and Real Gold Mining dipped 11% to HK$5.56.

China Life fell 3.2%.

Manulife Financial Corp shed 12.1% and Nam Tai Electronic Products Ltd advanced to HK$1.28 after its parent, Nam Tai Electronics Inc, committed to privatize the firm at a 163.2% premium.