HK Property Stocks Fall; Evergrande IPO Surges

Darlington Musarurwa
05 Nov, 2009
New York City

Hong Kong shares falls on profit taking and on mounting worries that property prices may face tighter regulation. Shanghai approves of Disney World in Pudong New District. Evergrande Real Estate surged 34% on its first day of trading in Hong Kong.

[R]6:00 AM New York, 6:00 PM Hong Kong – Hong Kong shares falls on profit taking and on mounting worries that property prices may face tighter regulation. Shanghai approves of Disney World in Pudong New District. Evergrande Real Estate surged 34% on its first day of trading in Hong Kong.[/R]

Hong Kong stocks declined as investors locked in gains, but stocks in Shanghai rose on the hopes of sustained economic rebound.

In Hong Kong trading Hang Seng Index fell 0.6% or 135.69 to 21,479.08, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 0.2% or 24.89 to 12,805.26. In Shanghai, CSI 300 Index rose 0.3% or 10.43 to 3,464.32.

Daily turnover on main-board increased to HK$60.77 billion from HK$60.06 billion yesterday.

China Government Sanctions Disney Shanghai

China Daily Online reported today the Shanghai municipal government has agreed to the planned construction of a Disney World in Pudong New District.

Walt Disney Co. and its Chinese partners are set to finalize the financial details of the transaction and plans detailing construction work.

The first phase of the project includes a “Magic Kingdom-style theme park with characteristics tailored to the Shanghai region and other amenities consistent with Disney''s destination resorts worldwide.”

NBS Urges Structural Reforms

Xinhua News Agency reported that National Bureau of Statistics chief economist Yao Jingyuan said today although the Chinese economy was experiencing economic growth, there was need for structural adjustments.

Yao said there was need for more effort to boost consumption in order to make economic growth rely on domestic demand.

“We should not pursue economic expansion in terms of size and speed in the fourth quarter or the next year, but put more efforts on structural adjustments,” he said.

China’s economy expanded 8.9% in the third quarter from 7.9% in the previous three months.

Gainers & Losers

Property stocks rose after China Securities Journal reported that a Chinese property developer has secured a deal for a plot of land close to the proposed Disney World site.

Shanghai Wai Gaoqiao Free Trade Zone Development gained 10%, Shanghai Jinjiang International Hotels Development increased 3.2%, Shanghai Pudong Road jumped 4.4% and Shanghai Construction climbed 5%.

Airlines also increased. China Eastern Airlines and Shanghai Airlines edged up 5%.

However, Hong Kong property stocks fell. Sun Hung Kai Properties declined 1.7% to HK$113.50 and Swire Pacific climbed down 3.4%.

Evergrande Real Estate increased 34.3% to HK$4.70 after it completed its initial public offering of 1.61 billion shares at HK$3.50 a share and raised HK$3.2 billion or $410 million.

Bank of East Asia increased 3.3% after brokerage Phillip Securities said the lenders interest margin may increase in 2010.

Media China dropped 7.3% and China Unicom jumped 3.8%.

China Resources Cement Holdings Ltd increased 2.1% to HK$3.82 on a recommendation from Morgan Stanley and reported on Bloomberg News.