China Stocks, Casinos Rise

Darlington Musarurwa
04 Nov, 2009
New York City

World Bank estimated that China is expected to meet its 8% economic expansion target supported by the government stimulus. Gold miners close higher on a rise in gold. Casino stocks surged after Macau casino revenues surged 42% in October.

[R]6:00AM New York, 6:00PM Hong Kong – World Bank estimated that China is expected to meet its 8% economic expansion target supported by the government stimulus. Gold miners close higher on a rise in gold. Casino stocks surged after Macau casino revenues surged 42% in October.[/R]

Hong Kong and Chinese stocks rose buoyed by commodity stocks as metal prices increased on optimism the global economy is recovering.

Gold prices advanced 2.9% to 1,085 per ounce after the Reserve Bank of India bought 200 tons of gold from the International Monetary Fund. Markets had earlier speculated China was behind the recent gold purchases.

Investor sentiment was also boosted after the World Bank Quarterly Economic update indicated Beijing is on course to meet its 8% growth target this year.

In Hong Kong trading Hang Seng Index rose 1.8% or 374.71 to 21,614.77, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 2.6% or 229.51 to 12,830.15. In Shanghai trading CSI 300 Index edged up 0.5% or 18.46 to 3,453.89.

Daily turnover on main-board declined to HK$60.06 billion from HK$61.01 billion yesterday.

Macao Daily reported that October month revenues at casinos on the island increased 42% from a year ago. Casino stocks increased more than 6% in Hong Kong.

China on Course to 8% Growth

World Bank reported in its Quarterly Economic Update that China is on course to meet 8% growth target spurred by the Rmb4 trillion stimulus.

Although the demand is expected to remain subdued in 2010, China’s exports are forecasted to resume growth. However, China’s external surplus is expected to contract markedly this year.

The Bank also noted that the problems of asset bubbles and misallocation of financial resources need to be addressed.

“In the monetary sphere, risks of asset price bubbles and misallocation of resources amidst abundant liquidity need to be addressed. Significant additional fiscal stimulus does not seem warranted, although flexibility is,” said the World Bank.

Gainers & Losers

Gold miners rose after gold prices advanced 2.9% to 1,085 per ounce after India purchased 200 tons of gold from the International Monetary Fund.

Zijin Mining gained 5.7%, Realgold Mining grew 3.3% and Shandong Gold edged up 2.1%.

Asia Resources Holdings gained 1.8% after announcing it will buy a 55% stake in a mining and iron ore trading venture in Indonesia''s East Java province for HK$577.5 million.

Retailer Li & Fung increased 2.8% as brokerage HSBC raised its price target for the stock to HK$35 from HK$31.

PetroChina jumped 3.6% as Credit Suisse raised its rating on the stock to “neutral”.

Financial stocks increased. China Construction Bank rose 2.4% and Bank of China soared 2.7%.

China Unicom rose 2.6% after it announced it has signed up 1 million 3G subscribers.

Dongfeng Motor Group edged up 12.3%.

Lujiazui Finance fell 1.9% on profit taking.