Securities News Stand20080910

DARKET PERFORMANCE

Securities News Stand20080910

Market recap:

¾ Shanghai: shares closes 0.11% higher, breaking two-year low in mid-session

¾ Hong Kong stocks end lower on profit-taking

¾ Wall Street tumble on renewed concerns about financial sector

Macro-economy:

¾ Economy to continue 'doing fine'

¾ Govt to fuel rural growth

¾ Cheaper oil could lead to commodity price reform

Sectors & companies:

¾ Coke: boom hard to continue

¾ China Life courted by companies for funds

¾ China Mobile makes talking cheaper for 3G

¾ Vanke (000002) sales tumble 35% as measures curb demand

Market recap: Shanghai: shares closes 0.11% higher, breaking two-year low in mid-session

A market correction continued in the Chinese stock market on Tuesday as the major index ended

0.11 percent higher and broke a two-year low in mid-session. The benchmark Shanghai Composite Index finished 2.36 points, or0.11 percent higher, at 2,145.78. The Shenzhen Component Index rose 18.18 points, or 0.26 percent, to 7,022.18. (Xinhua News)

Hong Kong stocks end lower on profit-taking

Profit-taking in blue chips after the benchmark index's sharp rise in the previous session pulled Hong Kong shares lower Tuesday. The blue-chip Hang Seng Index fell 303.16 points, or 1.46 percent, to 20,491.11 after trading fluctuating between 20,299.97 and 20,543.15 during the session.

Wall Street tumble on renewed concerns about financial sector

U.S. stocks tumbled Tuesday on renewed concerns the financial sector with the Dow Jones industrials fell nearly 300 points. The Dow fell 280.01, or 2.43 percent, to 11,230.73. The Standard & Poor's 500 index declined 43.28, or 3.41 percent, to 1,224.51 and the Nasdaq composite index fell 59.95, or 2.64 percent, to 2,209.81.

Macro economy:

Economy to continue 'doing fine'

The government is fully confident of tiding over the difficult situation arising out of a global economic slowdown, Vice-Premier Wang Qishan said yesterday. Addressing overseas investors at an international fair for investment and trade, Wang said: "The overall economic situation in China is fine. The global slowdown seems to have little impact on the country's economy .because its GDP maintained its double-digit (10.4 percent) growth in the first six months of this year.

Govt to fuel rural growth

The rural area has a mass potential for change and the direction and consumption trends adopted by the approximate 200 million families across the nation is expected to help sustain China's slowing economy. The State Council has recently repeated the strategy of "further tapping the consumption potential in China's massive rural regions" when it reported to the National People's Congress on its economic policy portfolio for the next half of the year.



Cheaper oil could lead to commodity price reform

Cheaper international crude oil would be a good opportunity for China to reform its commodity prices, said an expert with the National Development and Reform Commission (NDRC).

Chen Dongqi, vice president of the NDRC's Academy of Macroeconomic Research estimated crude oil to fall to under 70 U.S. dollars a barrel in coming months. Currently, oil is more than 100

U.S. dollars a barrel.

"It would be a rare chance for China to accelerate its price reform of oil, electricity, gas, water and grain products," he said. "This chance only appeared once, shortly after the Asian Financial Crisis. We should make good use of it this time," said Chen.

Chen said price reform should be done in a gradual way. "In implementing reform, we should avoid too much immediate shock to prevent triggering a second wave of inflation."

Sectors:

Coke: boom hard to continue

The coke industry association of Shanxi Province calls upon its members to cap coke production so as to firm its price and fend off a possible pricing war and disorderly competition.

The rise of coke price has been drawing to an end since July this year, with increasing inventory and price retreat being the norm.

Industry insiders believe the correction of coke price in Shanxi Province may signify coke price drop across China. Coke market may present a volatile and declining trend in the next two months.

The association says that with the downstream iron & steel sector walking into the downturn cycle, coke demand has obviously shrunken. Therefore, it calls upon coke producers in Shanxin Province to cap production by 50% and reduce the selling price by 5%, or about 150 yuan per ton.

Companies:

China Life courted by companies for funds

CHINA Life Insurance Co, with 964 billion yuan (US$141 billion) in assets, said it's been approached by foreign banks and securities firms seeking to raise money after more than US$500 billion of credit market losses worldwide.

Chairman Yang Chao said the company was pleased with its US$300 million investment in the initial public offering of Visa Inc, whose shares have climbed 24 percent since they started trading in March in New York.

"A lot of foreign institutions, including banks, securities companies, insurers, and funds, have approached us for investments," Yang told reporters in Dunhuang in China's northwestern Gansu Province. "We won't let go of any opportunities like Visa." Yang didn't give any names of companies seeking funds.

China Mobile makes talking cheaper for 3G

China Mobile has cut the price of its mobile communications for its trial 3G services close to the rate for fixed-line phone under new packages that it will introduce in three cities first as it bids to woo enterprise, family and campus users.

China Mobile will launch the new packages, which will cut rates by more than 50 percent, within a year from this month, China Mobile said in a statement published on the Website of the Ministry of Industry and Information Technology yesterday.

It has chosen Guangzhou, Shenzhen and Tianjin as the first batch of cities to offer the new packages, said the world's No. 1 telco by subscribers. The new packages will be available in seven other cities, including Beijing and Shanghai, that have TD-SCDMA (time division-synchronous code division multiple access), or 3G, networks.

Under the new enterprise package, China Mobile offers users 500 minutes of calls costing 30

yuan (US$4.41), compared with 88 yuan for 600 minutes previously.

The TD-SCDMA call rate is 0.22 yuan for the first three minutes and 0.11 yuan for the following minute, lower than China Mobile's 2G (second generation) rate and similar to China Telecom's fixed-phone rate.

Vanke (000002) sales tumble 35% as measures curb demand

China Vanke Co, the nation's biggest publicly traded real-estate developer, yesterday said sales in August fell 35 percent from a year earlier, the third monthly drop, driving the shares to an

18-month low.

The home builder sold 4.07 billion yuan (US$595 million) of apartments last month with a total floor area of 474,000 square meters, Shenzhen-based Vanke said in a statement to the city's stock exchange. The shares fell 1.3 percent to 5.92 yuan at the end of trading in Shenzhen, their lowest close since March 2007.

Property demand in Chinese cities has as much as halved since the government last year raised minimum down payment requirements and increased rates on some mortgages to cool home prices, said CSC Securities (HK) Ltd analyst Liu Bin