Stocks in Shanghai, HK Surge

123jump.com Staff
04 Mar, 2009
New York City

Stocks in Hong Kong and Shanghai surged on the hopes that new economic stimulus package will help the economy and sustain consumption and market confidence. A latest read on manufacturing index increased from the previous month but still showed a contraction in the sector.

[R]6:00AM New York, 6:00PM Hong Kong – Stocks in Hong Kong and Shanghai surged on the hopes that new economic stimulus package will help the economy and sustain consumption and market confidence. A latest read on manufacturing index increased from the previous month but still showed a contraction in the sector.[/R]

Hong Kong market averages rose after former statistics bureau head Li Deshui said China’s premier Wen Jiabao will unveil an expanded stimulus package tomorrow.

Sentiment was further boosted when a measure of manufacturing rebounded in February.

Market Sentiment

In Hong Kong trading Hang Seng Index increased 2.5% or 297.27 to 12,331.15, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, surged 5% or 330.80 to 6,948.37. In Shanghai CSI 300 Index climbed 6.7% or 143 to 2,285.15.

Daily turnover on main-board increased to HK$44.96 billion from HK$43 billion yesterday.

China to Increase Subsidies

CCTV reported yesterday that minister of commerce Chen Deming said China will increase fiscal subsidies to stimulate domestic demand and expand domestic consumption.

Chen said developed countries are beginning to show a new round of financial deterioration.

According to the report, the minister of commerce says maintaining circulation of funds in the economy is key to expanding consumption and the central budget will increase funding for the development of the rural logistics service system.

""By the end of 2008, savings deposit balances in China reached Rmb22 trillion. Large amounts of savings have become a reservoir of consumption. As long as there are beneficial consumption policies and the environment for consumption is improved, we can transform a certain amount of savings into consumption,"" said Chen.

China Manufacturing Rises in February

Xinhua News Agency reported that the China Federation of Logistics and Purchasing said today the Purchasing Managers’ Index of China’s manufacturing sector increased to 49% in February from 45.3 the previous month.

A reading above 50% shows expansion, while a measure below 50% indicates contraction.

Gainers & Losers

Hong Kong stocks advanced 2.5% buoyed by Beijing’s commitment to expand the stimulus plan and after manufacturing rebounded in February.

Hong Kong Exchanges & Clearing climbed 6.6% to HK$59.60 after the company’s fourth quarter profit dropped lower-than-expected by 44%.

HSBC fell 4.4% to HK$44.20, but Standard Chartered advanced 8.3% to HK$73.35 after reporting profit increased 17% to $3.3 billion in the year ended December 31.

Other financial stocks rose on news that Chinese banks extended Rmb1.1 trillion in new loans in February. ICBC increased 5% to HK$3.18, China Construction Bank rose 4.8% to HK$3.96, China Life jumped 4.8% to HK$22 and Ping An gained 7% to HK$38.05.

Aluminum Corp of China edged up 6.7% to HK$3.90 and China Coal Energy rallied 6.7% to HK$4.78.

Property stocks rose. China Overseas Land rallied 4.6% and Guangzhou R&F Properties gained 10.8%.