China Gold Purchase; China CNR IPO

Darlington Musarurwa
29 Dec, 2009
New York City

Stocks in Shanghai and Hong Kong gained on the optimism about the economy. Commodities and natural resource related stocks increased. China added 454 tons of gold in the current year, the largest purchase by any nation. China CNR Corp rose 2.3% in its first day of trading.

[R]6:00 AM New York, 6:00 PM Hong Kong – Stocks in Shanghai and Hong Kong gained on the optimism about the economy. Commodities and natural resource related stocks increased. China added 454 tons of gold in the current year, the largest purchase by any nation. China CNR Corp rose 2.3% in its first day of trading.[/R]

Hong Kong and Chinese stocks gained over optimism on economic growth prospects. Yesterday China said its current year economic growth is likely to exceed 8% target.

In Hong Kong trading Hang Seng Index rose 0.1% or 19.22 to 21,499.44, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, fell 0.2% or 24.59 to 12,644.93. In Shanghai trading, CSI 300 Index edged up 0.6% or 22.30 to 3,500.74.

Daily turnover on main-board decreased to HK$34.42 billion from HK$37.89 billion yesterday.

China Becomes Biggest Buyer of Gold

People’s Daily Online reported today said that the World Gold Council noted China purchased 454 tons of gold, boosting its central bank reserves to 1,054 tonnes.

World central banks bought $28 billion worth of bullion, becoming a net buyer of gold for the first time in 21 years. Other biggest buyers were Russia and India.

The report notes that investment in gold is being driven by weaknesses in the U.S. dollar on concern over its huge debt burden and possible inflationary trends.

Gold prices are expected to rise as the U.S. struggles with a surge in debt and faces higher inflation in the next three to five years.

Gainers & Losers

Hong Kong realty stocks rebounded a day after when two residential plots were sold at a price below expected by analysts.

Sun Hung Kai Properties gained 1.6%, Cheung Kong jumped 1.8%, Henderson Land soared 0.9% and Sino Land edged up 0.5%.

Financial stocks fell. Ping An Insurance decreased 1.2%, Bank of China fell 1.2% and China Construction Bank plunged 0.6%.

Carpenter Tan became the third-best performing initial public offering in 2009 on the Hong Kong main-board after it surged 52.3% to HK$3.93 from its issue price of HK$2.58.

Schramm rose 14.3% from its issue price of HK$37 to HK$42.30.

Hunan Nonferrous Metals fell 16.1% to HK$3.02 after announcing its controlling shareholder intends to buy all outstanding shares it did not own at a discounted HK$1.73.

Brokerage stocks extended gains in Shanghai. CITIC Securities jumped 3.1% to Rmb30.79 and Haitong Securities rose 2.3% to Rmb18.80.

China CNR Corp rose 2.3% from its initial public offering price of Rmb5.56. The largest maker of rail and subway car maker sold 2.5 billion shares and China plans to expand its railway network to 120,000 kilometers.