The Hong Kong market dropped 200 points in early trading after being spooked when the Shanghai Composite index sank below 2,100. But Shanghai rebounded above that level and Hong Kong’s Hang Seng Index ended nearly unchanged, down 0.06% to 21,104. Last week the Hang Seng inched 0.3% lower. Turnover on Monday slumped from last week’s low levels. The index of Chinese stocks fell 0.4% to 9,795.
Big Chinese banks start reporting this week amid positive expectations, said Jackson Wong, vice president of sales at Tanrich Securities. Investors are encouraged that last week smaller banks like China Merchants (CIHKY) posted nice gains, he told Equities in an email.
But for the most part, investors a watching to see if the Federal Reserve Board, the European Central Bank and the People’s Bank of China launch new measures to stimulate the economy.
“With no major developments on the horizon, the market will still likely stay between 19700-20300 for another week before the summer ends,” said Wong. “In general, the market is waiting for the decisions from all the major central banks before it can make major moves.” End
Hong Kong Blue Chips: -12, -0.06%, to 20,107, 08-20-12, Hang Seng Index
Chinese Stocks in Hong Kong: -36, -0.4%, to 9,795, 08-20-12, HSCE Index
Shanghai Stocks: -8, -0.4% to 2,107, 08-20-12, Shanghai Composite Index.
Chinese Stocks in the U.S.: +1.8, 383.4, 08-17-12, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong blue chips fell 200 points in early trading after the Shanghai Composite Index tumbled below 2,100 but ended with a marginal loss as Shanghai regained its critical support level. Food and beverage maker Tingyi (TCYMY) jumped 5.0% after reporting strong profits. KGI Research
Quotable: “Looking ahead, unless there will be positive news flow about quantitative easing in the US and/ or Europe, sentiment will likely stay weak as corporate results should mostly see no positive surprise. Furthermore, investors may keep an eye on the HSBC Flash Manufacturing PMI (Purchasing Managers Index) in China, which is expected to be released on next Thursday. The benchmark index may see support level at 19,700 points.” BEA Securities. 08-17-12
Chinese Company to Watch: Giordano (GRDZF) “Dividend yields in 2012 and 2013 stand at 7%, adding further appeal.” UOB Kay Hian Group. 8-17-12
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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