Update | Hong Kong stocks down midday as fall in oil prices hits producers; Shanghai up
Hong Kong stocks declined by midsession on Wednesday morning as weakness in Chinese oil majors offset the gains posted by banking and manufacturing script after Beijing announced a 10-year strategic plan to support the upgrading of the nation’s manufacturing sector.
The benchmark Hang Seng Index lost 0.20 per cent, or 55.17 points, to 27,638.37, although the Hang Seng China Enterprises Index added 0.47 per cent to 14,258.06.
The Shanghai Composite Index added 1.33 per cent, or 58.54 points, to 4,476.09.
“From a valuation perspective, the Chinese A share market is trading at a par with the US, but if you look at China, the story is quite different. H shares are trading at just above 10 times, so there is still a huge discount to historical average,” said Winnie Chiu, senior director at Markets & Investment Solutions at Credit Agricole Private Banking.
Chinese oil companies retreated as oil futures fell in New York overnight to US$57.26 per barrel and a Goldman Sachs report forecast the price of oil could drop to as low as US$45 per barrel in October.
CNOOC fell 1.13 per cent to HK$12.26, a one-month low.
China’s State Council announced the “China Manufacturing 2025” plan on Tuesday that outlined nine strategic focal areas to develop in China’s manufacturing sector by 2025, including information technology, aerospace equipment, marine engineering equipment, bio pharmaceutical, energy saving automobile, rail transportation equipment, and agricultural machinery among others.
CAR Inc, China’s largest auto rental service provider, jumped 13.3 per cent to HK$20.1 after saying its net profit jumped 80 per cent in the first quarter to 177 million yuan overnight. Green car developer BYD added 2.9 per cent to HK$50.4.
Hanergy Thin Film Power Group, controlled by Chinese billionaire Li Hejun, sank 47 per cent to HK$3.91, before announcing a trading halt on Wednesday.
The company’s competitor Yingli Green Energy said in a report to the US securities watchdog last Friday that they have “substantial doubt” as to Hanergy’s ability to continue operating.
