Coal Miners, Utilities in China Rise

123jump.com Staff
18 Jun, 2009
New York City

Energy, mining and financials were among the most active stocks in Shanghai and Hong Kong. World Bank revised its China economic growth projection to 7.2% and estimated foreign exchange reserves to increase by $218 billion. Coal miners and electric utility companies surged.

[R]6:00 PM Hong Kong, 6:00 AM New York – Energy, mining and financials were among the most active stocks in Shanghai and Hong Kong. World Bank revised its China economic growth projection to 7.2% and estimated foreign exchange reserves to increase by $218 billion. Coal miners and electric utility companies surged.[/R]

Stocks in Hong Kong fell after the S&P lowered ratings on eighteen banks in the U.S. Investors generally look for a direction in the U.S. as the island relies heavily on trade flows between the U.S. and mainland China.

Hang Seng index in Hong Kong decreased 307.94 or 1.70% closed to 17,776.66, CSI 300 index in China higher 46.84 or 1.56% closed to 3,057.43.

World Bank revised its estimate of economic growth in China to 7.2% from 6.5% forecast in March. The world also felt compelled to tell Chinese government to not provide any additional stimulus until 2010.

The bank cited stimulus package that included heavy focus on infrastructure development and reliance on stimulating domestic demand. Exports are not likely to contribute to the economic growth in the current year.

The World Bank largely controlled by the governments of the U.S. and European nations estimated that foreign exchange surplus this year will decline to $218 billion after increasing at a rapid rate of $462 billion in 2007 and $418 billion and is expected to rise to $2.2 trillion at the end of the year.

Gainers & Losers

Chaoda Modern Agriculture Ltd plunged 15.5% to HK$4.52 after it planned an offering of 388 million shares at HK$4.60 a share to raise HK$1.74 billion.

China Petroleum & Chemical Corp added 3% to 10.41 yuan after Xinhua News reported that bond offering of 20 billion yuan may be finished this month and not in July.

China Zhongwang Holdings surged 8.7% to HK$9.11 after UBS issued positive comments and lifted its price target to HK$13.50.

Metals processors and miners declined after base metal prices fell in London and Shanghai trading.

Aluminum Corp of China declined 3% to HK$7.69, Jiangxi Copper fell 1.7% to HK$12.62 and Zijin Mining Group dropped 4.2% to HK$6.60.

China Shenhua Energy surged 5.5% to 28.07 yuan and Datong Cola industry soared 5.9% to 35.75 yuan after the World Bank estimated higher economic growth.

Banks in Hong Kong closed lower. The Bank of East Asia Limited dropped 1.7% to HK$23.50, HSBC Holdings Plc edged 1.2% lower to HK$65.95 and Industrial and Commercial Bank of China dropped 3.4% to HK$5.14.

China Minsheng Banking Corp in Shanghai increased 2.1% to HK$7.90 and

China Resources Power Holdings surged 4.9% to HK$17.96 and Huaneng Power International added 1% to HK$5.38 after BNP Paribas made positive comments on utility sector. China is expected to increase electric power tariff.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 137.13 or 1.39% to 9,703.72, Hang Seng index in Hong Kong decreased 307.94 or 1.70% closed to 17,776.66, CSI 300 index in China higher 46.84 or 1.56% closed to 3,057.43. ASX 200 index in Australia decreased 12.00 or 0.31% closed to 3,892.10. The KL Composite index in Malaysia lower 16.49 or 1.54% closed to 1,054.41.

The Kospi Index in South Korea decreased 15.41 or 1.11% to close at 1,375.76.SET index in Thailand closed lower 15.71 or 2.68% to 570.43 and JSE Index in Indonesia decreased 73.98 or 3.65% closed to 1,950.99. The Sensex index in India decreased 257.31 or 1.77% closed to 14,265.53.