Hong Kong stocks close 3.52% higher on mainland’s stimulus package
Written by Writer on Monday, November 10th, 2008
Hong Kong stocks close 3.52% higher on mainland’s stimulus package
HONG KONG, Nov. 10 (Xinhua) — Hong Kong stocks jumped 501.20 points, or 3.52 percent, to close at 14,744.63 on Monday, on mainland’s massive economic stimulus package and Wall Street’s rebound on Friday.
Turnover rose to 60.71 billion HK dollars (7.84 billion U.S. dollars) from Friday’s 48.8 billion HK dollars (6.3 billion U.S. dollars).
Investors welcomed mainland’s multi-billion-dollar stimulus package, saying that it boosted market confidence and benefited the economy in the long-term.
Stock markets in Japan and the Chinese mainland also soared after Sunday’s announcement of the 4 trillion yuan, or 586 billion U.S. dollars, package as Beijing joined moves by governments around the world to cushion the blow of the global slowdown.
The plan calls for higher government spending on roads, airports and other infrastructure, tax deductions for exporters and bigger subsidies to the poor and farmers. Spending on health and education will be increased, as well as on environmental protection and high technology.
“China’s plans will likely drive investor confidence and boost shares of China-related companies,” said Peter Lai, a director at DBS Vickers, noting “though worries of an economic slowdown in China remain, I’m not too worried about the medium to long-term prospects of the equities market.
The Chinese stock markets should have already bottomed out, Laisaid, adding that investors should begin to consider accumulating China-related stocks in Hong Kong.
Chinese metals producers outperformed all other sectors Monday on expectations that demand will rise as part of the stimulus plan,which includes heavy infrastructure spending.
Maanshan Iron jumped 35 percent to 2.26 HK dollars, Angang Steel rose 27 percent to 6.30 HK dollars and Jiangxi Copper climbed 18.6 percent to 5.10 HK dollars.
Building materials is one of best-performing sector. Anhui Conch Cement surged 31.48 percent to 35.35 HK dollars, China National Building Materials soared 42.33 percent at 5.74 HK dollars while Sinoma jumped 34.78 percent at 3.41 HK dollars.
Mainland financial services firms also rose sharply, with China Life up 9.0 percent to 22.50 HK dollars, Bank of Communications gaining 8.2 percent to 4.91 HK dollars, and China Construction Bank adding 7.7 percent to 4.34 HK dollars.
Analysts said they expected limited near-term upside for the blue-chip index following its 38 percent rebound in the last two weeks. They forecast strong resistance as investors brace for more layoffs in Hong Kong and weak economic data in the U.S. expected later this week. (One U.S. dollar = 7.742 HK dollars)
