China Stocks Fall; Citic Bank in $1.8 B Deal

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

Stocks in Hong Kong and Shanghai dropped on a weakness in financials. China

[R]6:00AM New York, 6:00PM Hong Kong – Stocks in Hong Kong and Shanghai dropped on a weakness in financials. China’s consumer price index falls 1.5% in April. China’s new bank loans drop in April after surging in March. Hang Seng Index replaces Yue Yuen with China Resources Power and maintains 42 constituents.[/R]

The benchmark stock index dropped 1.7% in Hong Kong and 2.3% in Shanghai as caution returned to the market after consumer prices dropped 1.5% in April.

Chinese shares had previously increased for seven consecutive trading days.

In Hong Kong trading Hang Seng Index fell 1.7% or 301.92 to 17,087.95, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 2.9% or 287.63 to 9,764.27.

In Shanghai trading CSI 300 Index plunged 2.3% or 63.90 to 2,725.32.

Hang Seng Index Drops Yue Yuen

Hang Seng Indexes Company after it quarterly review replaced Yue Yuen Industrial (Holding) Ltd. with China Resources Power Holdings Co.

The compiler of the index had not altered the index in the last three quarterly reviews and dropped China Netcom Group Corp after it merged with China Unicom Ltd.

China CPI Drop 1.5% in April

National Bureau of Statistics in China reported today the country’s consumer price index, the key measure of inflation, declined 1.5% year-on-year in April, dropping for the third straight month.

Food prices fell 1.3% as pork prices shed 28.6% on falling demand. Non- food prices slipped 1.5%.

The report also notes producer price index- gauging inflation at the wholesale level- declined 6.6% in April from a drop of 6% in March.

However the PPI dipped 5.1% between January and April moths from the same period a year ago.

China to Stimulate Non-Ferrous Metal Industry

China’s State Council on Cabinet announced today a three-year plan that is oriented to stimulate the country’s non-ferrous metal industry.

According to the plan, the sector is expected to keep a steady operation in 2009 and realize sustainable development by 2011.

The sector will also be restructured to form five nonferrous metal corporations with advanced production capacity and technological innovation capability by 2011.

China Bank Credits Fall in April

The People’s Bank of China reported today that new bank loans dropped to Rmb591.8 billion in April after staying above Rmb1 trillion in three consecutive months. The loans surged to Rmb 1.89 trillion in March.

Outstanding loans in financial institutions increased 29.7% to Rmb35.55 trillion by the end of April.

Beijing has injected Rmb 4.58 trillion new loans into the economy in the first quarter to stimulate growth.

The deposit gained by Rmb1.03 trillion in April, increasing the outstanding deposit by 26.2% to Rmb53.29 trillion.

Gainers & Losers

Zijin Mining Group Co. fell 4.4%.

China Cosco Holdings shed 6% to Rmb12.52 after Credit Suisse Group downgraded shipping stocks to “underweight”. China Shipping Development Co. tumbled 6.6% to 13.18 and Cosco Shipping Co. fell 6.3% to Rmb10.65.

China Shenhua Energy Co. declined 2.8% as domestic power output dropped.

Air China Ltd. tumbled 5.2% after China reported its first case of swine flu. China Southern Airlines Co. declined 4.5% to Rmb5.27.

China Pacific Insurance Co. slipped 4.2% to Rmb17.88. China Citic Bank declined 3.7% to HK$4.16 after it said it will pay HK$13.6 billion or $1.8 billion to its parent China Citic Group to acquire 70.3% stake in Hong Kong based Citic International Holdings Ltd.

Jonjee High-Tech Industrial & Commercial Holding Co. slid 8.5% to Rmb11.35.

China Shenhua slid 2.8% to Rmb26.11, China Coal Energy Co. tumbled 5.3% to Rmb10.62 and Datong Coal Industry Co. shed 6.3% to Rmb32.46.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 19.15 or 0.20% to 9,451.98, Hang Seng index in Hong Kong decreased 301.92 or 1.74% closed to 17,087.95, CSI 300 index in China lower 63.90 or 2.29% closed to 2,725.32. ASX 200 index in Australia decreased 15.70 or 0.40% closed to 3,926.00. The KL Composite index in Malaysia lower 1.28 or 0.12% closed to 1,025.50.

The Kospi Index in South Korea increased 3.03 or 0.21% to close at 1,415.16. SET index in Thailand closed higher 7.46 or 1.41% to 535.18 and JSE Index in Indonesia decreased 31.79 or 1.71% closed to 1,830.74. The Sensex index in India decreased 193.44 or 1.63% closed to 11,682.99.