China Mobile Growth Slows; HK Unemployment 5.2%

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

Stocks in Hong Kong and Shanghai closed higher. Unemployment in Hong Kong in March increased to 5.2%. China Mobile, the largest wireless carrier by subscriber reported slowest quarterly earnings growth. China Telecom, the largest fixed line operator reported 27% decline in earnings.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong’s unemployment rate increases 5.2% in March quarter.[/R]

Hong Kong stocks rose on news that China will allow Hong Kong banks to issue yuan-denominated bonds.

In Hong Kong trading Hang Seng Index increased 1% or 149.64 to 15,750.91, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 2% or 177.86 to 9,230.04. In Shanghai trading CSI 300 index edged up 2.2% or 56.98 to 2,707.67.

Daily turnover on main-board declined to HK$57.1 billion from HK$75.3 billion on Friday last week.

Hong Kong Unemployment Rate Rises 5.2% in March

Hong Kong’s Census and Statistics Department reported today the country’s jobless rate gained 5.2% in the three months to March from 5% in the quarter ended February.

The underemployment rate increased to 2.1%. It is expected that the labor market will continue to deteriorate going forward.

Total employment in the period declined to 3,513,100 from 4,597,600 while the labor force increased from 3,685,100 to 3,694,900.

Secretary for Labour and Welfare Matthew Cheung said conditions in the labor market will remain tight in the short to medium term.

Government New Loans Not Limited to Rmb5 trillion

Xinhua News Agency reported that China Banking Regulatory Commission said on Saturday the government’s target of new loans is not limited to Rmb5 trillion.

Though Beijing said earlier it expects banks to extend Rmb5 trillion new loans this year, new loans in the first quarter of the year have already exceeded 93% of the total amount.

Gainers & Losers

Hong Kong stocks gained 1% leveraged by financial stocks on reports profit at China’s state-owned enterprises increased 26% from a year earlier and 86% from the previous month in March.

Bank of China climbed 5% and Bank of Communications gained 3.5%.

Hong Kong banks also increased as China announced that it will allow the former’s banks on the mainland to issue yuan-denominated bonds. BOC Hong Kong edged up 2.9%.

China is also mulling allowing mainland tourists to visit Hong Kong while on Taiwan cruises. Economists forecast that the move will shore Hong Kong revenues by an additional HK$100 million in revenue every year. Star Cruises jumped 37.8% to HK$1.13.

Airlines increases on expectations that the sector will rebound this year. Air China rose 8.3% to HK$3.51, China Eastern Airlines climbed 16.9% to HK$1.45 and China Southern Airlines gained 14%.

Realty stocks increased on speculation the global economy will recover. Cheung Kong Holdings increased 3.5% and New World Development advanced 4.1%.

Gold stocks fell as gold prices shed 1.4% to $867.9 per barrel. Zijin Mining fell 4.4%.

China Mobile Earnings Growth Slows

China Mobile, the largest telecom company in the world reported first quarter revenue rose 9.2% to 101.3 billion yuan and earnings rose 5.2% to 25.2 billion yuan or $3.7 billion. The company added 19.9 million net new subscribers in the quarter for a total of 47716 million.

The company blamed the slowdown in earnings to high penetration of mobile phones and current economic weakness.

The net new subscriber growth has declined from 22.8 million in the year ago quarter and from 21.2 million in the fourth quarter of last year.

Separately, China Telecom reported 27% decline in earnings to 4.7 billion yuan on 14.9% increase in operating revenue to 50.9 billion yuan.

In the quarter the company lost 4.4 million wire line subscribers to 204 million but mobile subscribers increased to 32.8 million from 27.9 million and average mobile user revenue was unchanged from the fourth quarter a year ago.