Shanghai and Hong Kong stock markets took a holiday Monday, and will start up Tuesday after losing considerable ground late last week. Worries about the U.S. economic recovery wiped out major gains from early last week – and then some. News about the U.S. economy and the European debt crisis will be big movers again this week.
Another piece of news that weighed on China stocks last week was Reuters’ exclusive report that China planned to relieve up to 3 trillion RMB (US$463 billion) in debts from local governments, with some of it possibly shifting to state-run banks. The news pushed listed Chinese banks’ stocks lower.
BOCOM International, a subsidiary of China’s Bank of Communications, said on its website it was skeptical of the report. If the report is not contradicted, it could continue to sink bank stocks..
Otherwise there isn’t much news on tap this week, according to Howard Gorges, vice chairman of South China Brokerage. Corporate reporting season is over for most big companies, and there will be no important Chinese economic statistics coming out until next week.
On the IPO front, Resourcehouse (0394) will have its offering on Friday. The Australian company cooperates with Chinese companies to produce some of its iron and coal ore. End
Hong Kong Blue Chips: -304, -1.3%, to 22,950, 06-03-11, Hang Seng Index
Chinese Stocks in Hong Kong: -226, -1.7% to 12,751, 06-03-11, HSCE Index
Shanghai Stocks: +0.8%, 2,728, 06-03-11, Shanghai Composite Index.
Chinese Stocks in the U.S.: -9.0 to 432.6, 06-03-11, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong and China markets closed for holiday on Monday. KGI Research
Quotable: "Looking forward into next week, most attention in the market will continue focusing on the euro-zone debt crisis and the impact of bad debts on Chinese banks. Investors will also be cautious ahead of China inflation data (to be released on 14th June 2011). We see the market sentiment to remain in a weak tone but strong support should be seen at 22,500 level." BEA Securities. 6-3-2011
Chinese Company to Watch: "(Oil producer) CNOOC (883). Expansion in overseas markets helps solving the bottle-neck of output. Share price broke major resistance and may rebound to peak in April." Core Pacific Yamaichi. 6-2-2011.
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For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN
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