Hong Kong, Shanghai Stocks Fall

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

Stocks in Hong Kong and in Shanghai declined after investors sold stocks on recent gains in stocks. Coca-Cola proposed acquisition of Huiyuan Juice is still under review. China added new anti-monopoly regualtions last year. Ahead of voting on rights issue, HSBC traded higher.

[R]6:00AM New York, 6:00PM Hong Kong- Coca-Cola proposed acquisition of Huiyuan Juice still under review.[/R]

Hong Kong stocks declined on a sell off sparked by recent stock gains.

Market Sentiment

In Hong Kong trading Hang Seng Index fell 0.8% or 98.62 to 12,878.09, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 1.2% or 91.27 to 7,508.08. In Shanghai trading CSI 300 Index rose 3.6% or 80.79 to 2,322.40.

Daily turnover on main-board increased to HK$49 billion from HK$46.7 billion yesterday.

Huiyuan Juice Purchase Under Review

China’s Ministry of Commerce spokesperson Yao Jian reported today that Coca- Cola’s bid for Huiyuan Juice Group is still under review, since the new anti-monopoly laws were put in practice last year. China’s anti-monopoly law was passed in 2007 and took effect on August 1, 2008.

According to the report, the review of the proposed transaction was initiated on November 20 of last year and will end on March 20. Coca Cola applied for anti-trust exemption at the end of 2008.

Yao said government will consider whether the proposed transaction will disturb market competition or will harm consumers or competitors.

HK Companies Freeze Pay

Xinhua News Agency reported today that the Hong Kong Institute of Human Resource Management (HKIHRM) noted in its January 2009 Pay Trend Survey that of the 45 companies that confirmed their pay adjustments, 68.9% were making an overall zero pay adjustment.

Companies are observed to be prudent in making pay adjustments and are using the pay freeze as a cost control option.

The report notes that most of the 45 companies that are running the guaranteed-bonus policy awarded their employees with the average bonus of one month pay.

The 33 companies with a non-guaranteed bonus scheme, 93.2% of their eligible employees were awarded the bonus, with the average size of 1.08 months of pay compared with 95% of eligible employees awarded a bonus of 1.42 months of pay.

Co-chairman of the Remuneration Committee of HKIHRM Lai Kam-tong said, “Given a rather gloomy economic outlook, we believe the downward trend will continue. Base pay increases will now be offered on a more selective basis.”

Gainers & Losers

Hong Kong stocks slipped 0.8% on profit taking after a rise in indexes in the last five trading sessions.

HSBC increased 2.9% to HK$41.15 as investors to prepare to vote on its record rights issue. Goldman Sachs also upgraded the stock to “sell” from “neutral”.

Air China soared 7.8% to HK$2.48 after passenger traffic increased 6%. Merrill Lynch maintained a “buy” rating on the stock, claiming the airline will turn profitable in 2009.

China Life dropped 5% to HK$24 after brokerage Credit Suisse cut its rating on the stock to “neutral” from “outperform.”

Tianjin Port Development Holdings declined 13.3% to HK$1.95 on reports the company will pay $1.4 billion for control of Shanghai-listed rival Tianjin Port Co Ltd.

China Huiyuan Juice fell 1.9% to HK$10.30 after China''s Ministry of Commerce said Coca-Cola’s purchase of the company is still under anti-monopoly review.