HK & China - Market Direction 01 (May08 - Oct08)

[-dol-]

REFILE-HK shares close at 1-yr low; China Comm Cons drops 04 Sep 2008 17:02

* Stocks hurt by earnings, economic slowdown concerns

* China Communications Construction tumbles on downgrades - Yet another downgrade!

* Shipping stocks roiled by global slowdown fears

(Refiles to include final closing prices) (Updates to close)

By Parvathy Ullatil

HONG KONG, Sept 4 (Reuters) - Hong Kong shares fell 1 percent to close at a one-year low on Thursday, weighed by earnings concerns amid slowing economic growth, while China Communications Construction <1800.HK> plummeted on broker downgrades.

China's top builder of highways and ports tumbled 13.7 percent to HK$10.74, its lowest level in 15 months, as analysts forecast softening investment growth in China's construction sector and further raw material price hikes. The stock was the most actively traded issue of the day.

Citigroup cut its rating on the stock to sell from hold with a reduced target price of HK$11.20, while Deutsche Bank downgraded the company to hold from buy, slashing its target price to HK$13.70 from HK$20.50. Both the notes were dated Sept. 3.

"It's easier for a broker to downgrade a stock because that usually gets a strong reaction from this market. Investors hardly buy on upgrades anymore," said Steven Leung, director with UOB Kay Hian. - to generate commissions???

The benchmark Hang Seng Index <.HSI> was down 195.58 points at 20,389.48, its lowest close since August 17, 2007.

Mainboard turnover rose slightly to HK$56.5 billion ($7.2 billion) from HK$56.1 billion on Wednesday.

"The next two or three days are extremely critical as liquidation sales in commodities should help the market find its bottom quickly from here on," said Alex Wong, director with Ample Finance Group. - Still hopeful!

The Hang Seng has fallen in 14 of the last 21 sessions but intermittent gains like a sharp post-earnings relief rally last month have kept the index from breaking below 20,000 points.

The HSI has lost more than 26 percent so far this year and 35 percent from its October 2007 highs.

Shares in China Netcom <0906.HK> closed 2.2 percent higher, after jumping close to 6 percent earlier, after Spain's Telefonica <TEF.MC> said it had agreed to expand its stake in the Chinese carrier by 5.74 percent for up to 802 million euros ($1.16 billion) [ID:nNL438586].

Shares in wireless operator Unicom <0762.HK>, which is merging with Netcom under a government-orchestrated reorganisation of the world's largest telecoms industry, also gained 2 percent.

The China Enterprises Index <.HSCE> of top Hong Kong-listed mainland Chinese firms fell 1.4 percent.

Bulk shipping companies continued their downtrend, falling in line with a 4.9 percent overnight slump on the global freight index.

The Baltic Dry Index <.BADI>, which measures changes in the cost of shipping commodities, fell for an 11 straight session to hit a seven-month low on Wednesday on deepening concern over a global economic slowdown which would erode demand for commodities. - Conditions deteriorating...

China Cosco <1919.HK>, the nation's largest shipping conglomerate, dropped 6.2 percent to HK$12.40, its lowest level in more than a year, while China Shipping Development <1138.HK> fell 5.1 percent.

Chinese beverage-makers continued to rally after China Huiyuan Juice <1886.HK> announced a landmark $2.5 billion takeover bid from Coca-Cola <KO.N> on Wednesday.

Beer brewer Kingway Brewery Holdings <0124.HK>, which is slated to announce its interim earnings today, soared 23.5 percent.

Huiyuan's closest rival, China Haisheng Juice <0359.HK>, advanced 2 percent after falling on Wednesday.

But Huiyuan Juice slid 7.7 percent to HK$10.48 after gaining more than 160 percent on Wednesday. The stock is trading well below the HK$12.20 per share offered by Coca-Cola as some investors are concerned over whether the deal will go through without a hitch. (Reporting by Parvathy Ullatil; Editing by Lincoln Feast) (([email protected]; +852 28436415; Reuters Messaging: [email protected])) Keywords: MARKETS HONG KONG STOCKS

[winston]

SHANGHAI SECURITIES NEWS

The latest Chinese stock exchange trading data, extending through last Thursday, show:-
1) mutual funds have generally been continuing to sell off A shares,
2) insurers have turned to cautious buying of financial stocks, and
3) foreign QFII investors have been actively bargain-hunting for blue chips and companies that are leaders in their industries.

[kennynah]

so SSE no give face to US futures indexes this morning....

[winston]

SSE is up today at 0.6% now.

[winston]

Dow Futures: >250 points
HK: Up 750 points
SSE: Down 2%

1) Expect the HK market to close off it's high today
2) Just bought a Put today, as SSE is very weak and I expect some profit taking in HK before lunch or during the afternoon
3) Will close the Puts position by the end of today due to the expected strength in the US markets

[winston]

Would SSE bring HK down today or will HK encourage SSE to not drop so much today ??

===================================

China stocks slide despite surging Asian markets

China's stock market continued sliding to fresh 20-month lows, greatly underperforming strong regional markets, because of concern about a slowing Chinese economy and heavy supplies of fresh equity.

The Shanghai Composite Index was down 2.18 percent at 2,154.356 points in very thin turnover at midday.

Losing Shanghai shares outnumbered gainers by 831 to 89.

The index tumbled 3.29 percent on Friday to a 20-month closing low, breaking below its 2001 peak of 2,245 points, which had previously been considered important technical support.
REUTERS

[-dol-]

Today, SSE "decoupled" from the rest of the world.

Only other market to follow SSE is Karachi (down 0.49%).

[Cherry]

winston wrote:
The Shanghai Composite Index was down 2.18 percent at 2,154.356 points in very thin turnover at midday.
Losing Shanghai shares outnumbered gainers by 831 to 89.

dol wrote:
Today, SSE "decoupled" from the rest of the world.

Winston and Dol

What do you read into the decoupling of the SSE from the rest of the world today?
How serious does this imply and also its impact on the S chips listed in Singapore?

On one hand we read about Warren Buffet wanting to buy into a China Bank and people like Jim Roger touting 'buy China'. On the other hand, we don't see strong hands participating in the SSE today.
I was thinking: Is the SSE slow in joining the rally, or the SSE is too realistic to bother to join the bear rally, or is it fundamentally too weak to have any buying support to join the rally?
Would you like to share your views?

[winston]

Hi Cherry,

Wah... very deep questions...

What do you read into the decoupling of the SSE from the rest of the world today?

It may be China specific. They were worried about stocks that are coming out of their lock-up periods as well as the slowdown in the economy.

How serious does this imply and also its impact on the S chips listed in Singapore?

It is very serious. As for the S chips, I dont think the foreign fund managers are interested in them. The better and bigger Chinese companies are listed in HK.

I was thinking: Is the SSE slow in joining the rally, or the SSE is too realistic to bother to join the bear rally, or is it fundamentally too weak to have any buying support to join the rally?

Fundamentally, too weak to join the party..


Take care,
Winston

[Cherry]

winston wrote:

Wah... very deep questions...

Hi Winston

Your explicit answers fathom out the facts in a few short, simple and clear sentences.

Thank you very much.