Super Currency Call From China

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

China calls for the establishment of super currency that is not dependent upon one country. The call for the global currency reform comes ahead of meeting of G-20 nations and the worry that China may suffer if inflation accelerates in the U.S.

[R]6:00 AM New York, 6:00PM Hong Kong - China’s capital inflows appears to have slowed. China to issue first local government bonds on March 30.[/R]

Hong Kong stock indexes rose buoyed by the $1 trillion program unveiled by the Obama Administration to repair bank’s balance sheets. Stocks also gained on strong earnings from Bank of China.

China called for the establishment of “super currency” that world can trade ahead of the meeting of G20 nations. The Chinese call only adds to the growing worry of reckless spending by the U.S. to shore up its economy may flood the world with inflation. The reserve currency status allows the U.S. not to worry about inflation in its domestic economy induced by the printing of the dollar but world currencies may take a dive against the dollar.

China has amassed more than $750 billion in reserves and worried that rapid acceleration in inflation will erode its purchasing power.

In Hong Kong trading Hang Seng Index advanced 3.4% or 4.62 to 13,910.34, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 1.3% or 103.38 to 8,063.29. In Shanghai trading CSI 300 Index soared 0.5% or 12.39 to 2,451.78.

Daily turnover on main-board soared to HK$63.9 billion from HK$55.31billion yesterday.

China’s Capital Inflows Slowing

Xinhua News Agency reported today that vice governor of the People’s Bank of China Hu Xiaolian said yesterday capital inflows into China have been slowing, but there hasn’t been any serious capital outflows.

“Changes have occurred in transitional capital flows as the financial crisis has continued. But a serious outflow of capital has not happened in China so far. Generally speaking capital is still flowing in, but both its scale and speed has declined sharply,” said Hu.

China to Issue First Local Government Bonds

China’s Ministry of Finance reported today that it will issue Rmb3 billion in local government bonds on behalf of the Xinjiang Uyghur Autonomous Region on March 30.

Local government bond sales are expected to reach Rmb200 billion this year.

The interest rate for the 3-year bonds will be set through bidding with the interest rate being paid annually.

Bonds will become tradable from April 3 on the interbank market and securities exchanges.

China is currently planning Rmb950 billion in Treasury bill sales to finance a record fiscal deficit and its massive economic stimulus program.

Gainers & Losers

Financial stocks gained on U.S. plans to repair the bank’s balance sheets. HSBC increased 9.8% to HK$45.80, after its rights climbed 32.3% to HK$17.46.

Bank of China edged up 2.2% and BOC Hong Kong increased 6.6%. Hong Kong Exchanges & Clearing rose 7.3% to HK$74.

Zijin Mining slipped 6.5%. Li & Fung declined 1.9% to HK$19.20 after Goldman Sachs removed the stock from its conviction buy list.

Telecom jumped 1.9% to HK$3.19.

Bank of China Profit Rises 14.4% in 2008

Bank of China reported today full year profit increased 14.4% to Rmb64.36 billion from the same period a year earlier.