Investors Look Yuan to Rise

123jump.com Staff
17 Nov, 2009
New York City

Currency markets were rife with rumors that Beijing will let the yuan rise on the President Obama visit. However, Ministry of Commerce spokesperson issued a statement that suggested otherwise. Stocks struggled. TCL advanced on a joint venture deal to produce flat screens.

[R]6:00 AM New York, 6:00 PM Hong Kong – Currency markets were rife with rumors that Beijing will let the yuan rise on the President Obama visit. However, Ministry of Commerce spokesperson issued a statement that suggested otherwise. Stocks struggled. TCL advanced on a joint venture deal to produce flat screens.[/R]

Shanghai stocks rise on Taiwan, China trade pact. China reluctant to appreciate the yuan[/R]

Hong Kong stocks fell as investors were disappointed by Beijing’s assertion that it will not let the yuan appreciate.

However, stock indexes in China rose after China signed a trade pact with Taiwan.

In Hong Kong trading Hang Seng Index fell 0.1% or 29.83 to 22,914.15, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 0.1% or 19.60 to 13,732.05. In Shanghai trading, CSI 300 Index gained 0.1% or 2.56 to 3,628.35.

Daily turnover on main-board declined HK$71.6 billion from HK$71.6 billion yesterday.

China, Taiwan Sign Financial Pact

Taiwan’s Financial Supervisory Commission said in a statement yesterday the country has signed a memorandum of understanding covering cross-border financial supervision.

The pact is expected to be operational in two months time. Through the deal, lenders in Taiwan will be able to invest in China.

According to Reuters News, Taiwan will make regulatory amendments to allow Chinese banks to invest on the island.

In addition, Taiwan will sign the economic cooperation framework agreement- containing details of China and Taiwan lenders investing in each other- early next year.

China Reluctant to Appreciate Yuan

Reuters News reported that China’s Ministry of Commerce intimated that it will not let the yuan rise, notwithstanding the visit by U.S. President Obama this week.

Speculation was rife in the market that Beijing will change its exchange rate management policy.

“Either from the perspective of promoting stable global economic development, or from the perspective of promoting a recovery in Chinese exports, we must provide a stable and predictable environment for our enterprises, including macro-economic policy and currency policy,"" said a ministry spokesman.

Gainers & Losers

China Metal Recycling dropped 24% to HK$8.57 after announcing its executive director has resigned.

Meadville Holdings Ltd increased 48% to HK$3.18 after TTM Technologies Inc agreed to purchase its printed circuit board business for $521 million.

China Merchants Securities closed at 33.61 yuan, which is an 8.4% rise from its IPO price. The company raised as much as Rmb11.1 billion in an initial public offering.

Financial stocks rose after Beijing and China signed an investment pact. Bank of China rose 0.7% to 4.30 yuan after announcing it is ready to invest in Taiwan.

TCL advanced 10% to 4.57 yuan after it announced a joint venture to invest Rmb24.5 billion in a project to make liquid crystal displays for flat-screen TVs.