China Inflation Accelerates, Loans Decline

Mayank Mehta
11 Mar, 2010
New York City

China reported a rise in inflation and industrial production in February driven by economic stimulus and seasonal factors. Inflation gained for the fifth month in a row and 16-month high. New loans declined to $103 billion but ahead of the 22% annual increase target set by the central bank.

[R]9:00 PM Hong Kong, China – China reported a rise in inflation and industrial production in February driven by economic stimulus and seasonal factors. Inflation gained for the fifth month in a row and 16-month high. New loans declined to $103 billion but ahead of the 22% annual increase target set by the central bank.[/R]

China reported a raft of economic data and all point robust expansion. New loans, industrial production and inflation accelerated in February. Seasonal factors and Lunar New Year may have distorted the monthly data but the two moth picture present a vibrant economy and stimulus at works.

Consumer price index gained 2.7% from a year ago and new loans were down to 700 billion yuan or $103 billion compared to 1.07 trillion yen, still ahead of expectations and retail sales surged 22.1% according to National Bureau of Statistics.

Retail sales increased 17.9% in the first two months and industrial production surged 20.7% in the period.

The broader money supply measured as M2 increased 25.5% in the month after rising at 26% in January. Urban fixed asset investment advanced 26.6%.

Hang Seng index in Hong Kong increased 0.74 to 21,208.29, and CSI 300 index in China lower 26.17 or 0.79% to 3,279.69.

Shanghai Movers

Anhui Jianghuai Automobile Co., Ltd dropped 4.7% to 10.71 yuan and the light-truck exporter is set to kick off construction on a plant in Vietnam in April, the China Daily reported and quoted Chairman Zuo Yan''an.

Baoshan Iron & Steel Co., Ltd closed unchanged at 8.53 yuan and the steel producer has taken the lead to raise the prices of steel wires from April.

China Vanke Co., Ltd the listed property developer decreased 1.1% to 8.82 yuan, Gemdale Corporation the development and sale of real estate fell 1.1% to 13.60 yuan and Poly Real Estate Group Co., Ltd the property development declined 0.7% to 19.77 yuan.

Jinxi Axle Company Limited dropped 1.6% to 19.61 yuan.

SAIC Motor Corporation Limited the carmaker dropped 2.9% to 20.51 yuan.

Shanghai Pudong Development Bank Co., Ltd rose 2.7% to 21.30 yuan after China Mobile Ltd. agreed to purchase 2.2 billion class A Shares for 39.8 billion yuan or HK$45.26 billion.

Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd fell 2.0% to 23.31 yuan.

Wuhan Double Co., Ltd surged 10.0% to 12.42 yuan.

HK Movers

BYD Company Limited increased 5.7% to HK$70.50 after the maker of batteries and cars may set up an assembly plant in California and its U.S. headquarters, the Los Angeles Business Journal reported, citing unnamed sources.

China Overseas Land & Investment Limited declined 1.0% to HK$16.98 after the developer controlled by the country’s construction ministry will acquire Everbright Real Estate''s 1.7 million-square-meter land reserves according to hexun.com reports March 10.

China Resources Land Limited the state-controlled property developer fell 0.3% to HK$17.34.

China Mobile Limited the phone company rose 1.6% to HK$75.35 and it agreed to acquire 20% of the Shanghai Pudong Bank.

Esprit Holdings Limited rose 1.7% to HK$58.15.

Geely Automobile Holdings Limited gained 3.7% to HK$4.16 after the automaker arranged financing to buy Volvo division of Ford Motor Company for about $2.10 billion, a Swedish business daily reported on Wednesday.

Guangzhou R&F Properties Co., Ltd decreased 1.7% to HK$12.72.

Li & Fung Limited the supplier for retailers rose 2.4% to HK$40.00.

Parkson Retail Group Limited the department-store chain gained 4.3% to HK$13.50.

Sun Hung Kai Properties Limited closed unchanged at HK$114.40 after the property developer reported first half revenues fell 12% to HK13.3 billion from HK$15.1 billion a year ago. Net profit in the first half rose 1,972%to HK$14.3 billion or HK$5.59 per diluted share compared to net profit of HK$692 million or HK$0.27 per share a year ago.