China Manufacturing Expands; Property Worries

Mayank Mehta
04 Jan, 2010
New York City

China region stocks closed mixed. Shanghai stocks gained and Hong Kong stocks decreased. Manufacturing expanded in December according to separate reports. Real estate developers declined after Shanghai tightened home purchase rules.

[R]8:00 PM Hong Kong – China region stocks closed mixed. Shanghai stocks gained and Hong Kong stocks decreased. Manufacturing expanded in December according to separate reports. Real estate developers declined after Shanghai tightened home purchase rules.[/R]

Hang Seng index in Hong Kong decreased 49.22 or 0.23% to 21,823.28, and CSI 300 index in China lower 16.27 or 0.46% to 3,559.41.

A private estimate of manufacturing industry in China and India showed a faster than expected increases in December. The purchasing managers’ index after adjusting for seasonal swings increased to 56.1, the highest read since the tracking began in April 2004 by HSBC Holdings and Markit Economics.

The official measure release by China on January 1 indicated that manufacturing expanded at the fastest pace since February 2008.

Shanghai Stock Movers

Automakers increased after the latest read on the manufacturing index showed an expansion in December. SAIC Motor increased 3.2% to Rmb26.96 and Chongquing Changan Automobile Co. added 3.4% to Rmb14.50.

Sanan Optoelectronics Co. surged daily limit 10% to Rmb58.03 and the company plans to spend Rmb50 million to build an electronic testing facility in Anhui province.

Real estate developers declined after Shanghai tightened regulatory requirements for first time home buyers. Poly Real Estate decreased 2.2% to Rmb21.90 and China Vanke Co. declined 1.9% to Rmb10.60.

Industrial Bank decreased 3.4% to Rmb38.94 and Shanghai Pudong Development Bank Co. dropped 2.3% to Rmb21.19.

Hong Kong Stock Movers

Property developers declined in Hong Kong on the worries that regulators will curb property prices. Sino-Ocean Holdings Ltd decreased 2% to HK$7.04 and Glorious Property Holdings Ltd declined 1.7% to HK$3.45.

Banks declined on the worries that the asset bubble may be forming in the property market. China Construction Bank decreased 1.2% to HK$6.59 and Industrial & Commercial Bank of China Ltd declined 1.1% to HK$6.37.

Sands China Ltd increased 5.2% to HK$9.95 after Goldman Sachs and UBS recommended the stocks with a “buy” rating.

China Life Insurance Company decreased 0.7% to HK$38.10 and Ping An Insurance Group Co declined 0.7% to HK$67.50 after insurance companies are likely to change accounting policies to meet new regulatory requirements.