China Auto Sales Surge, HK Stocks Gain

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

Stocks in Hong Kong surged on the optimism that economic stimulus will revive the growth. The larger than expected economic package in Japan also lifted stocks in Asia. March auto sales surged 10% on the government subsidies to 772,400 on 40% increaese in minivan demand.

[R]6:00AM New York, 6:00PM Hong Kong – Stocks in Hong Kong surged on the optimism that economic stimulus will revive the growth. The larger than expected economic package in Japan also lifted stocks in Asia.[/R]

Hong Kong stocks gained 3% on resurgent optimism on the prospect of future economic growth.

The market will be closed tomorrow and Monday for the Easter Holiday.

In Hong Kong Hang Seng Index rose 3% or 426.55 to 14,901.41, and China Enterprises Index of Hong Kong listed mainland shares, or H shares, advanced 3.3% or 285.11 to 8,831.82. In Shanghai trading CSI 300 Index soared 1.6% or 38.32 to 2,517.67.

Auto and minivan sales in March surged in China according to the latest statistics from China Association of Automobile Manufacturers. Minivan demand soared after the government encouraged sales with subsidies in the rural area. China lowered its sales tax on cars that have engines smaller than 1,600 cc. Automakers SAIC Motor Corp and Donfeng Motor Group have surged more than 75% in the last three months.

Mundell Says Chinese Growth May Rise to 8%

People’s Daily Online reported today that Nobel Laureate in economics Robert Mundell forecasts that China’s economy has the potential to reach 7% to 8% despite the impact of the global financial crisis.

Mundell says interventions by Beijing to prop economic growth are at the early stages of development.

He urged that the Remnibi must be added to the Special Drawing Rights by the International Monetary Fund, while the proportion occupied by the U.S. needs to be adjusted to 40% from the current 45%.

The report notes that the Remnibi share in the SDR must be between 11% and 16%.

China to Issue Rmb22 billion Long-Term Treasury

China’s Ministry of Finance reported yesterday that it will issue the fifth batch of long-term book-entry bonds worth Rmb22 billion yen this week.

The issue period is between April 9 and April 14 and the bonds, which have a term of 30 years, will have an annual interest rate of 4.02%.

The ten batches of book entry treasury bonds will be issued in the second quarter of this year.

Gainers & Losers

Hong Kong shares gained 3% led by financial stocks on bullish expectations on the rebound of the global economy.

Ping An Insurance climbed 7.7% despite a 94.4% drop in net profit in the fourth quarter after Merrill Lynch raised its target price on the stock by 12.5% to HK$54.

China Life rose 4.9% to HK$27.90.

Financial stocks gained after the State Council sanctioned yuan trade settlement outside China. BOC rose 4.5% to HK$9.52.

HSBC Holdings climbed 5.3% to HK$50.80 after Goldman Sachs raised its price target to HK$55 from HK$41.

Esprit Holdings declined 4.6%.

CITIC Pacific soared 12.1% to HK$10.60 after a management restructure that saw the ouster of founding chairman Larry Yung Chin Kin and managing director Henry Fan Hung Lin.

CITIC Chairman Resigns

CITIC yesterday announced a top management reshuffle and the resignation of founding chairman Larry Yung Kin and managing director Henry Fan Hung Ling.

Current vice-chairman and president of CITIC group Chang Zhenming took over as chairman and managing director.

The company recorded a loss in excess of HK15 billion from unauthorized hedging by senior financial managers.