The Hang Seng Index in Hong Kong slumped 0.4% to 22,513 after hitting four year-best closes last week. The index of Chinese companies inched 0.1% lower to 11,294.
In addition to taking time to digest recent gains the market stalled at least temporarily because the major Chinese economic policy meeting the started Saturday did not produce any unexpected new measures. The Economic Work Conference confirmed emphasis on urbanization and agriculture modernization, but did not announce anything concrete, said Jackson Wong, vice president of sales at Tanrich Securities.
“However, on the back of all the QEs (quantitative easings) from major central banks and improved economic data from China, especially the rebounding A-shares, the market will act more positively on good news,” Wong told Equities in an email. He sees resistance this week at 22,800 and support at 22,400.
The Work Conference also repeated the intent to maintain a stable monetary policy but an aggressive fiscal stance. Much of the fiscal stimulus will go into urbanization and modernization of agriculture, Wong said, and stocks in these area will gain this week. End
Hong Kong Blue Chips: -92, -0.4%, to 22,513, 12-17-12, Hang Seng Index
Chinese Stocks in Hong Kong: -13, -0.1%, to 11,294, 12-17-12, HSCE Index
Shanghai Stocks: +10, +0.4% to 2,160, 12-17-12, Shanghai Composite Index.
Chinese Stocks in the U.S.: +4.3, 390.1, 12-14-12, Bank of New York Mellon, ADR Index-China - closed by storm
Insight: Hong Kong retreated from last week's gains in moderate turnover after an important Chinese economic policy meeting that started Saturday produced no unexpected new measures. However, the Mainland A-share market continued to rally, which helped Chinese brokerages: Haitong Securities (HAITY) +3.7%. KGI Research
Quotable: "Since Hong Kong equity market is being driven by liquidity, the upward trend should continue and the benchmark index is likely to test 23,000 points next week." BEA Securities. 12-14-12
Chinese Company to Watch: "KINGDEE INT'L (00268, HK) -- Major software developer in China. Suffered loss in first 3Q12, triggered share price decline. However, major institutional investors increased stake at HK$1.5 which will boost investors confidence." KGI Asia. 12-17-12
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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
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