HK GDP Shrank 2.7%; Luxury Home Tax Up

Mayank Mehta
24 Feb, 2010
New York City

Hong Kong fourth quarter GDP increased 2.3% and for 2009 shrank 2.7% on 12.6% decline in exports. Hong Kong increased stamp duty on luxury homes. Cathay Pacific and Air China negotiate air cargo venture. U.S. impose 12% duty on Chinese steel pipes covering $382 billion of imports.

[R]9:00 PM Hong Kong, China – Hong Kong fourth quarter GDP increased 2.3% and for 2009 shrank 2.7% on 12.6% decline in exports. Hong Kong increased stamp duty on luxury homes. Cathay Pacific and Air China negotiate air cargo venture.[/R]

Hong Kong’s gross domestic product in the fourth quarter increased 2.3% from the third quarter and 2.6% from the fourth quarter a year ago. Economy expanded at 0.4% in the third quarter.

Finance Secretary Donald Tsang estimated GDP in 2010 to expand 5%. For 2009, economy contracted at 2.7% on exports declined of 12.6%.

Secretary Tsang increased stamp duty to 4.25% from 3.75% on home that are sold for H$20 million or $2.5 million.

Hang Seng index in Hong Kong decreased 155.26 or 0.75% to 20,467.74, and CSI 300 index in China higher 45.85 or 1.43% to 3,244.48.

The Obama administration imposed 12% duty on steel pipes imported from China. The duty will impact $382 million of imports to the U.S. and was imposed after U.S. Steel Corp and France based Valllourec SA filed petition and complained of unfair subsidies.

Pipes imported from Tianjin Pipe Co. will incur 11.06% duty and Hengyang Steel Tube Group International Trading Inc will have 12.97% of duty according to the statement from the U.S. Commerce Department.

Shanghai Movers

Bank of Communications Co., Ltd rose 0.5% to 8.09 yuan.

China Railway Group Limited rose 1.9% to 5.80 yuan after the construction company was downgraded to “neutral” from “buy” at Goldman Sachs Group Inc.

Huayuan Property Co the company rose 3.3% to 9.37 yuan.

Wuhan Iron and Steel Company Limited added 2.2% to 6.85 yuan after the company was upgraded to “neutral” from “sell” at UBS.

HK Movers

Property developers increased. Sun Hung Kai increased 1.5% to HK$107.20 and Sino Land added % to HK$13.92.

Anta Sports Products Ltd increased 3.2% to HK$11.70 after 2009 net increased 40% to 1.25 billion yuan.

BYD Company Limited fell 2.9% to HK$61.70 and the maker of batteries and cars aims to increase exports to between 5% and 10% from 2% in the current year of its 800,000 production. The company will also delay its electric car production after China has still not finalized safety benchmark according to the South China Morning Posse.

Cathay Pacific Airways Limited rose 0.2% to HK$14.12 after the carrier and affiliate Air China intend to sign an agreement to form a new air cargo joint venture before the end of the week according to Business Week.

Hutchison Whampoa Limited rose 0.2% to HK$55.65.

Industrial and Commercial Bank of China Limited fell 1.6% to HK$5.48.

Top Form International Ltd declined 3.1% to 62 HK cents after it plans to expand bra manufacturing capacity in China.