Tuesday 30 June 2009

China markets fall on petrol price rise

Mainland markets fell today, led by auto and steel shares, after the government raised the price of petrol and diesel for a third time this year, and iron-ore price negotiations ended without agreement.

The Shanghai Comprehensive Index dropped 0.54 percent to 2959.36, paring the monthly gain to 12.40 percent and quarterly gain to 24.70 percent. The small and medium enterprises SME Comprehensive Index slid 0.19 percent to 4325.64.

Hong Kong’s property stocks fell the most, dragging benchmark indices. The Hang Seng Index lost 0.81 percent to 18378.73, but ending the second quarter with a gain of 35.38 percent, the best in almost 10 years. The Hang Seng Growth Enterprises Index plunged 2.59 percent to 575.20. The Hang Seng China Enterprises Index lost 0.23 percent to 10962.61.

Taiwan's TAIEX Index advanced 0.64 perent to 6432.16.

Steel makers lost 2.42 percent on average after China’s iron ore price talk with the three largest producers ended today without any agreement. Rio Tinto, the world’s second biggest iron-ore producer, said some contracts may revert to spot market pricing tomorrow.

Bao Steel (SH:600019) China’s largest steel steelmaker by market value, dropped 2.76 percent. Angang Steel Co. (SZ:000898;HK:347), the second-largest, declined 3.01 percent on Shenzhen and 2.58 percent on Hong Kong. Maanshan Steel (SH:600808;HK:0323) lost 2.81 percent on Shanghai and 3.37 percent on Hong Kong.

Gold producers climbed as the price of bullion rose. Zijin Mining Group Co.(SH:601899; HK:2899), the country’s largest gold producer, added 2.6 percent on Shanghai and 2.04 percent on Hong Kong. Zhongjin Gold Corp. (SH:600489), the second largest, climbed 7.26 percent. Shandong Gold (SH:600547), the third, surged to the 10 percent trading cap. Chenzhou Mining Group (SZ:002155), the eighth, climbed 9.76 percent. Sino Gold Mining (HK:1862) advanced 3.54 percent.

Prosperity International Holdings Ltd. (HK:0803), a building materials supplier, dropped 4.76 percent after announcing less than expected profit increase of 1 percent.

It has transpired that several local officials appear to be shareholders in the company building the nearly-finished 13-story apartment in Shanghai that toppled over Saturday, killing one worker.

It is illegal for government officials to be direct investors in such projects. Shanghai Meidu Real Estate Company, the developer, had been operating illegally since its licence expired in 2004.

The Hang Seng Property Index declined 3.22 percent. The mainland-listed property shares dropped 0.77 percent on average. China Vanke Co. (SZ:000002), China’s largest listed developer, dropped 1.09 percent. Beijing North Star co. (HK:0588) plunged 7.17 percent. Hopson Development (HK:0754) lost 6.83 percent. Guangdong Shirongzhaoye Co.(SZ:002016) declined 4.13 percent.

China raises fuel prices

The Chinese government raised fuel prices starting today to help state-owned refiners avoid losses amid higher crude oil costs. Prices for gasoline and diesel were increased by RMB 600 a ton, the National Development and Reform Commission said yesterday. Automoblie and airline shares dropped on the news.

Sinopec (SH:600028, HK:0386) added 0.66 percent on Shanghai trading and 3.32 percent on Hong Kong trading.

SAIC Motor Co. (SH:600104), China’s biggest carmaker, slid 4.11 percent, the biggest one-day decline since April 27th. Beiqi Foton Motor Co. (SH:600166) lost 3.92 percent. Chongqing Changan Automobile Co. (SZ:000625) fell 2.63 percent. Tianjin FAW Xiali Automobile Co. (SZ:000927) declined 2.24 percent.

Brilliance China Automotive Holdings (HK:1114) dropped 4.26 percent. Geely Automobile Holdings (HK:0175) lost 1.41 percent.

Air China Ltd. (SH:601111; HK:0753), the nation’s largest international carrier, dropped 1.4 percent on Shanghai trading and 1.3 percent on Hong Kong trading. China Southern Airlines (SH:601055; HK:1055) dropped 2.71 percent on Hong Kong trading.


www.proactiveinvestors.com.hk

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