Chinese Rights Offerings; Stocks Weak

Darlington Musarurwa
26 May, 2009
New York City

Investors are still digesting the impact of recent share sales announced or completed by several companies. Investors are still digesting the impact of recent share sales announced or completed by several companies. In Hong Kong property stocks gained but in Shanghai energy related stocks fell.

[R]7:00 PM Hong Kong, 7:00 AM New York – More companies took advantage of market strength to raise capital in Shanghai and Hong Kong.[/R]

Stocks in China and in Asia declined after North Korea fired two short-range missiles. The missiles were fired on a day after the detonation of nuclear device.

Investors are still digesting the impact of recent share sales announced or completed by several companies.

North Korea’s show of military strength for the second day in a row unnerved markets in the region. After the close, Hong Kong Financial Secretary John Tsang released additional stimulus plan of HK$16.8 billion including tax cuts and government spending.

Hang Seng index in Hong Kong decreased 130.26 or 0.76% closed to 16,991.56, CSI 300 index in China lower 32.95 or 1.20% closed to 2,719.76.

Of the 42 stocks in the Hang Seng index, 26 declined, 14 increased and 2 were unchanged. Energy stocks in Shanghai declined.

Gainers & Losers

Sino Land surged 8.7% to HK$13.94 after it broke ground to build residential buildings in Ma On Shan district.

Sun Hung Kai Properties Ltd increased 2% to HK$92.65 and New World Development Co. added 5.2% to HK$14.52.

More companies are using the current market strength to raise capital. In Shanghai trading, Zhongtian Urban Development Group declined 2.6% to 9.97 yuan after it planned to sell 188 million shares priced at 8.33 yuan a share. Nanjing Iron & Steel Co. declined 1.5% to 4.58 yuan after it planned to price 2 billion shares at 4.23 yuan.

Daphne International Holdings Ltd increased 11% to HK$32.62 after the company agreed to sell 550 million yuan convertible bonds to TPG Capital.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 36.19 or 0.39% to 9,310.81, Hang Seng index in Hong Kong decreased 130.26 or 0.76% closed to 16,991.56, CSI 300 index in China lower 32.95 or 1.20% closed to 2,719.76. ASX 200 index in Australia increased 50.50 or 1.35% closed to 3,788.40. The KL Composite index in Malaysia lower 1.51 or 0.14% closed to 1,051.63.

The Kospi Index in South Korea decreased 28.86 or 2.06% to close at 1,372.04. SET index in Thailand closed lower 7.82 or 1.42% to 542.69 and JSE Index in Indonesia decreased 33.38 or 1.77% closed to 1,857.59. The Sensex index in India decreased 323.99 or 2.33% closed to 13,589.23.