HK Stocks Fall After 11% 3-day Rally

123jump.com Staff
07 Apr, 2009
New York City

Stocks in Hong Kong fell as investors locked gains after a three-day rally of 11%. Shanghai stocks rose as Beijing announced health care reforms lifting pharmaceutical and medical shares increased. At the end of March, HK foreign exchange reserve rises to $186.2 billion.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong forex reserves soars to $186.2 billion in March.[/R]

Stocks in Hong Kong fell as investors locked gains after a rally in the last three trading sessions. Shanghai stocks rose as Beijing announced health care reforms lifting pharmaceutical and medical shares increased.

In Hong Kong trading Hang Seng Index fell 0.5% or 69.07 to 14,928.97, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 0.4% or 31.80 to 8,772.65. In Shanghai trading CSI 300 Index gained 0.3% or 6.45 to 2,576.95.

Daily turnover on main-board declined to HK$50.9 billion from HK$62.2 billion yesterday.

HK Forex Reserve Rises to $186.2 billion in March

Hong Kong Monetary Authority reported today that its official foreign currency reserves increased to US$186.2 billion at the end of March from US$177.1 billion realized at the end of February.

Hong Kong is currently the eight largest holder of foreign reserves. Foreign currency reserves, including unsettled forward contracts, advanced to US$186.2 billion at the end of March.

The HKMA says the total foreign currency reserve assets now represent 45% of HK dollar M3.

China’s Recovery Forecasted to Begin This Year

The World Bank reported in its East Asia and Pacific Update that China’s economic recovery might begin this year and become buttressed in 2010 because of the huge stimulus by Beijing.

Real gross domestic product growth in East Asia is projected to ease to 5.3% in 2009 from 8% a year ago.

However the Bank says sustainable economic recovery in the region depends on developments in advanced economies.

The Bank in March downgraded the country’s growth estimate for 2009 to 6.5% from 13% in 2007.

Gainers & Losers

Hong Kong stock indexes dropped 0.5% on profit taking after surging 11% gain in the last three trading sessions.

However financial stocks trimmed losses on news that new lending will soar to Rmb3 trillion in March.

PCCW rose 0.5% to HK$4.00 on expectations that its buyout is near completion. However Hong Kong’s securities watchdog has since lodged an appeal over alleged vote buying after a court sanctioned the company’s $2.2 billion privatization plan.

Energy stocks shed after crude oil prices dipped 2.9% to $49.6 per barrel. CNOOC plunged 3.1% to HK$8.21 and PetroChina declined 2.1%.

Financial stocks fell on lingering worries bad debts will mount by the end of next year. HSBC fell 1.6% to HK$51.20 and Standard Chartered slipped 9% to HK$106.30.

Mainland financial stocks gained. ICBC rose 1.7% and China Construction Bank edged up 1.3%.

China Shipping Container Lines tumbled 9.4% to HK$1.83 on profit taking. Brokerage Morgan Stanley also cut the stock’s rating to ""underweight"" from ""equal-weight.""

Shui On Construction and Materials fell 3.1% after reported that it will privatize China Central Properties through an all-share and a mixed cash and share offer.