Chinese Manufacturing Expansion Slows

Mayank Mehta
01 Mar, 2010
New York City

Hong Kong and Shanghai benchmark indexes increased on a rise in commodities prices. Resource stocks surged. Manufacturing index expanded at a slowest pace in nearly a year and the new orders index tumbled in February.

[R]9:00 PM Hong Kong, China – Hong Kong and Shanghai benchmark indexes increased on a rise in commodities prices. Resource stocks surged. Manufacturing index expanded at a slowest pace in nearly a year and the new orders index tumbled in February.[/R]

Stocks in Hong Kong and Shanghai gained after resource stocks and commodities increased. Copper increased nearly 1.5% in Shanghai trading after Chile was struck with 8.8 magnitude earthquake.

Hang Seng index in Hong Kong increased 448.23 or 2.17% to 21,056.96, and CSI 300 index in China higher 42.76 or 1.30% to 3,324.42.

Jiangxi Copper Co. and Tongling Nonferrous Metals Group Co. closed up daily trading limit of 10% in Shanghai trading.

Manufacturing activities expanded at a slower pace in February largely on the account of holiday season. The index published by Federation of Logistics and Purchasing and National Bureau of Statistics declined to 52 from 55.8 in January. Any read above 50 indicate an expansion.

The latest read in the month was weakest since March 2009. The index of exports declined to 50.3 from 53.2 in January and index for new orders dropped to 53 from 59.9 in January.

The manufacturing index published by the government hit the low of 38.8 in November 2008.

Toyota Motor Corp President Akio Toyoda apologized for recent recall of vehicles in China and pledged to cooperate with regulators in any investigation. He also said that Toyota is targeting to sell 13% more vehicles totaling 800,000 vehicles in the current year.

Toyota sales in China in 2009 increased 21% to 709,000, slower than the industry sales growth of 46%.

Shanghai Movers

Aluminum Corporation of China Limited added 2.2% to 12.96 yuan.

China Construction Bank Corporation the bank rose 1.2% to 5.70 yuan.
China Vanke Co Ltd increased 0.1% to 9.44 yuan and after the close reported 2009 net income surged 32% to 5.33 billion yuan or $780 million.

Jiangxi Copper Company Limited surged 9.9% to 38.54 yuan after the producer of the metal was upgraded to “neutral” from “underweight” at HSBC.

Ping An Insurance (Group) Company of China, Ltd the insurer rose 3.7% to 46.70 yuan.

AIG agreed to sell its Asia based insurance division AIA Ltd that insures life, accident and health and sells insurance through 250,000 agents across Asia to UK based Prudential Plc for $35.5 billion.

Shanghai Electric Group Company Limited the maker of power equipment rose 0.5% to 9.21 yuan.

HK Movers

China Mengniu Dairy Company Limited an investment company added 2.5% to HK$23.75.

HSBC Holdings plc, the banking and financial services organization said 2009 net interest income fell 4.5% to $40.7 billion from $42.6 billion a year ago. Net profit for the year rose 2% to $5.83 billion or $0.34 per diluted share compared to net profit of $5.73 billion or $0.41 per share a year ago

Hang Seng Bank Ltd increased 1.2% to HK$114.90 after it reported 2009 net income of HK$13.2 billion.