China Reserves Above $2 Trillion; FDI Drops

123jump.com Staff
15 Jul, 2009
New York City

Metals and shipping related stocks in Shanghai surged and banking and financial service sectors closed higher in Hong Kong. China

[R]7:00 PM Hong Kong, 7:00 AM New York – Metals and shipping related stocks in Shanghai surged and banking and financial service sectors closed higher in Hong Kong. China’s foreign reserves crossed above $2 trillion for the first time and foreign direct investment declined 6.8% in June and 17.9% in the first half.[/R]

Stock markets in Shanghai and Hong Kong advanced as optimistic views about earnings and on the exports to the U.S.

The Hang Seng index in Hong Kong increased 372.93 or 2.09% to 18,258.66 and CSI 300 index in China closed higher 38.55 or 1.12% to 3,493.30.

Of the 42 stocks listed in the Hang Seng index, 41 increased and 1 decreased.

The People’s Bank of China reported that foreign exchange reserves in the second quarter increased by $178 billion to $2.13 trillion. The reserves increased sharply in the quarter compared to $7.7 billion in the first quarter.

Foreign direct investment in China declined 6.8% in June to $8.96 billion and in the first half fell 17.9%. The investment generates 55% of trade and 11% jobs in large cities.

Gainers & Losers

HSBC Bank increased 1.3% to HK$64.85 and Bank of Communications added 2.8% to HK$8.49. Goldman Sachs reported sharply higher earning on stronger underwriting fees and higher trading revenues. The news lifted banking stocks in Hong Kong and Europe.

Tsingtao Brewery added 3.4% to HK$27.10 after Macquarie Group lifted the rating on the company to “neutral” from “underperform” and was first reported on the Bloomberg News.

China Petroleum & Chemical Corp added 0.2% to HK$6.20 after Xinhua News Agency reported that the former chairman Chen Tonghai’s death penalty was suspended.

Commodities rallied in Hong Kong and Shanghai. China Nonferrous Metals Company surged 7% to HK$1.37 after the company is in a deal with a gold processor in the northwestern province.

In Shanghai trading, Yunnan Copper Industry surged daily limit of 10% to 24.68 yuan and Jiangxi Copper surged 8.5% to 35.91 yuan.

Gunagdong Electric Power Development increased 2.1% to 7.75 yuan after it estimated profit between 350 million yuan and 450 million yuan for the first half compared to loss of 56 million yuan.

Shipping companies increased after the rise in freight rate measure Baltic index. China Cosco surged to daily limit of 10% to 16.08 yuan and China Shipping Container Lines Com increased 6.8% to 4.85 yuan.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 7.44 or 0.08% to 9,269.25, Hang Seng index in Hong Kong increased 372.93 or 2.09% to 18,258.66 and CSI 300 index in China closed higher 38.55 or 1.12% to 3,493.30. ASX 200 index in Australia increased 57.40 or 1.48% to 3,924.50. The FTSE Bursa KL Composite index in Malaysia closed higher 17.61 or 1.63% to 1,097.24.

The Kospi Index in South Korea increased 35.30 or 2.55% to close at 1,420.86. SET index in Thailand closed higher 10.11 or 1.75% to 587.86 and JSE Index in Indonesia increased 66.70 or 3.24% to 2,123.28. The Sensex index in India increased 399.54 or 2.88% to 14,253.24.