Seven-Day Rally in Hong Kong

123jump.com Staff
08 May, 2009
New York City

Hong Kong Monetary Authority reassured investors that banks have adequate capital after conducting their own tests. The central bank also suggested that the island is attracting net capital which contributed to the rally in the last seven sessions. Foreign currency reserves increase by $7.1 billion.

[R]6:00 AM New York, 6:00PM Hong Kong - Hong Kong Monetary Authority reassured investors that banks have adequate capital after conducting their own stress tests. The central bank also suggested that the island is attracting net capital which contributed to the rally in the last seven sessions. Foreign currency reserves rise by $7.1 billion in April.[/R]

Hong Kong stocks gained after the HK Monetary Authority chairman Joseph Yam reassured markets that local banks have adequate capital after they performed their own stress tests.

Stocks gained for the seventh trading day in a row as the island sees a steady inflow of capital from China and other regional nations.

In Hong Kong trading Hang Seng Index increased 1% or 171.98 to 17,389.87, and the China Enterprises Index of Hong Kong listed mainland stocks, or H shares, gained 1.6% or 154.97 to 10,051.90. In Shanghai trading CSI 300 Index edged up 0.8% or 22.14 to 2,789.22.

Banks closed higher after the HKMA assertion that banks have adequate capital and the banking system is healthy. BOC Hong Kong Holdings Ltd. increased 1.4% and Hang Seng Bank Ltd gained 1.1%. China Construction Bank Corp surged 5.2%.

Daily turnover on main-board declined to HK$86.8 billion from HK$95.2 billion yesterday but still at 50% higher than a month ago.

HK Foreign Reserves Rise by $7.1 billion

Hong Kong Monetary Authority reported yesterday the country’s official foreign currency reserve assets increased by US$7.1 billion to $193.4 billion in April.

Foreign currency reserve assets, including unsettled forward contracts, gained to $194 billion, which represents eight times the currency in circulation.

HK is the world’s seventh largest holder of foreign currency reserves after China, Japan, Russia, Taiwan, India and South Korea.

China’s Pork Prices Fall 10.4% in April

Xinhua News Agency reported today the National Development and Reform Commission said yesterday pork prices in Chinese cities fell 10.4% to an average Rmb10.13 per kilogram from the comparable year ago period on over market supply and falling demand.

Demand also dropped in summer, when people traditionally eat fewer pork products.

The proportion between pork prices and grain prices eased to 6.18 to 1, the lowest point since May 2007.

Food prices fell 0.7 percent from a year ago in March, with pork prices dropping 23%.

Gainers & Losers

Hong Kong stocks increased driven by Chinalco as prices of aluminum increased. Aluminum prices have increased 5% this month in international markets.

China Zhongwang Holdings declined 5%. The company raised $1.3 billion in August public offering. Chalco advanced 9% to HK$7.63.

Energy stocks gained. PetroChina Co Ltd edged up 4.1% to HK$8.31 and Sinopec gained 1.1% to HK$6.36.

Li & Fung Ltd shed 4.6% to HK$21.60 after the company announced that most suppliers are expected between 5% and 15% drop in volumes this year. Esprit Holdings Ltd plunged 9.9% to HK$51.20. Giordano International Ltd declined 1.2% to HK$1.70 on sales in China declined.

Hutchison Telecommunications International Ltd tumbled 14.2%.

Geely Automobile Holdings dropped 4.5% to HK$1.28 after the company announced yesterday it intends to bid for European automakers Volvo or Saab.

China Construction Bank Corp increased 5.2% to HK$5.25 after Bank of America Corp said it wanted to remain a strategic partner with the bank.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 47.13 or 0.50% to 9,432.83, Hang Seng index in Hong Kong increased 171.98 or 1.00% closed to 17,389.87, CSI 300 index in China higher 22.14 or 0.80% closed to 2,789.22. ASX 200 index in Australia increased 3.00 or 0.08% closed to 3,941.70. The KL Composite index in Malaysia higher 3.31 or 0.32% closed to 1,026.78.

The Kospi Index in South Korea increased 11.05 or 0.79% to close at 1,412.13. JSE Index in Indonesia increased 33.68 or 1.84% closed to 1,862.53. The Sensex index in India decreased 240.51 or 1.98% closed to 11,876.43. The Markets of Thailand were closed today.