Financials Drag HK Stocks

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

Stocks adjusted to lower level after China did not expand its large stimulus package. In Hong Kong trading banks and insurance companies fell. Manulife Financial Corp plunged 10.1% to HK$62.30 after its Toronto-listed parent company shares fell yesterday.

[R]6:00AM New York, 6:00PM Hong Kong - China to expand bond issuance to fund stimulus projects.[/R]

The benchmark stock index dropped 2.4% after Beijing did not expand already a large stimulus package.

In Hong Kong trading Hang Seng Index fell 2.4% or 289.72 to 11,921.52, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 1.7% or 115.28 to 6,788.47. In Shanghai trading CSI 300 Index plunged 0.8% or 18.34 to 6,785.58.

Daily turnover on main-board increased to HK$46.9 billion from HK$43.1 billion yesterday.

China to Expand Bond Issuance

Xinhua News Agency reported today that minister of the National Development and Reform Commission Zhang Ping said Beijing will expand issuance of enterprise bonds to fund its stimulus projects.

Zhang said 45 enterprise bonds worth Rmb130 billion have been issued from the fourth quarter of 2008.

According to the report, more than 50 enterprises have applied for bond issuance worth Rmb100 billion.

China will also grant policy-related bank loans with relatively long maturity and low interest rates to fund various projects.

Gainers & Losers

Hong Kong stocks tumbled 2.4% after Beijing failed to announce the much anticipated stimulus plan.

However financial stocks increased before the rebalancing of the benchmark index on Monday next week. China Construction increased 1.5% and Bank of China jumped 1.4%.

HSBC declined 2.9% to HK$43.50, Hang Seng Bank tumbled 7.4% to HK$73.60, BOC Hong Kong slipped 5% and Bank of East Asia tumbled 5.3% to HK$13.32.

Manulife Financial Corp plunged 10.1% to HK$62.30 after its Toronto-listed parent company shares fell yesterday.

Energy stocks dipped after crude oil prices dropped 4% to $43.6 per barrel. CNOOC fell 3.2% to HK$6.08, PetroChina shed 2.7% to HK$5.12 and Sinopec Corp declined 3.1%.

Aluminum Corp of China fell 3.6%, but Zijin Mining rose 2.6%.

Lingbao Gold rallied 6.4 % after gold prices increased 2.3% to 927.8 per ounce.