China Stocks Fall; Cosco Delays Ships

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

A sharp fall in world trade has led China Cosco to delay three of its nine container liners orders and may delay unknown number of commodity vessels. China Shipping Container Lines Co also estimated loss in the first quarter. Jiangxi Copper first quarter net income dropped 89% from a year ago.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong composite interest rate falls 0.29% in March.[/R]

Hong Kong stocks fell on a sell off as investors were unnerved by reports that China might tighten lending regulations in order to tame record loan growth in the first quarter.

There are fears that most of the money is being channeled into stock speculation.

In Hong Kong trading Hang Seng Index fell 2.7% or 407.44 to 14,878.45, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 3.5% or 317.84 to 8,721.25. In Shanghai trading CSI 300 Index dipped 3.7% or 99.16 to 2,576.28.

HK Composite Interest Rate Drops 0.29% in March

Hong Kong Monetary Authority reported yesterday the country’s composite interest rate dropped 0.29% at the end of March from 0.33% recorded at the end of February.

The HKMA Deputy chief executive officer Peter Pang notes that increased liquidity in the banking system has lowered the interest rates.

Pang added the composite interest rate will be influenced by domestic and external monetary conditions.

Small Airports to Receive Government Subsidies

China Daily reported today that under Beijing’s new regulation small ports have been reclassified as public infrastructure and is expected to receive government subsidies.

The new regulation makes it imperative for the government to support airports effective July 1.

China has 103 small airports - those that serve less than 1 million passengers a year.

According to the report, secretary-general of China Civil Airport Association Wang Jian said many ports rely on subsidies from local governments.

""""Small airports need local governments' support because they are built more out of a strategic need than the need for profit. Some of China's large airports are listed companies. The regulation may lead to changes in airport charges, which will affect their performance,"""" said Wang.

Gainers & Losers

Financial stocks fell on news that China might tighten regulations after record loan growth in the first quarter. China Construction Bank declined 5.9% to HK$4.33, Bank of China shed 4.1% to HK$2.82, ICBC plunged 3.4%, Bank of Communications dipped 2.8% and HSBC slipped 1.7%.

However, Standard Chartered climbed 5.6% after Goldman Sachs upgraded the stock to """"buy.""""

CITIC Pacific increased 3% to HK$12.20 after selling its stock to an Inner Mongolia power generation company for about Rmb2 billion.

China National Building Materials advanced 6.9% to HK$13.86 after reporting profit increased 66% in fiscal 2008. Brokerage Goldman Sachs also raised its target price on the stock by 18% to HK$17.

Air China jumped 4 % to HK$3.62. Dah Sing Banking Group fell 12% to HK$5.80.

Earnings Review

A sharp fall in world trade has led China Cosco to delay three of its nine container liners oreders and may delay unknown number of commodity vessels.

China Cosco Holdings Company, the dry bulk and container carrier reported 2008 revenue of 130.18 billion yuan, an increase of 16.6% from 2007 and net income attributable to shareholders increased 40.4% to 11.61 billion yuan from a year ago.

Both basic and diluted earnings per share increased to 1.137 yuan and the board recommended a final dividend of 0.29 yuan for the year 208.

China Shipping Container Lines Co also estimated loss in the first quarter.

Jiangxi Copper first quarter net income dropped 89% from a year ago. Jiangxi Copper first quarter profit was 151.8 million yuan or 0.05 yuan compared to 0.42 yuan a year ago. Sales in the first quarter declined 28% to 9.9 billion yuan from 13.7 billion yuan.

Jiangxi Copper in Hong Kong trading declined 7.2% to HK$8.61.