Market Open: Hang Seng to consolidate after property curbs

PUBLISHED : Monday, 29 October, 2012, 2:38pm
UPDATED : Monday, 29 October, 2012, 2:42pm

Hang Seng could see more consolidation after Friday’s retreat from a 10-day rally, as heavyweight local developers may got hit following the fresh property curbs and third-quarter earnings continue to overhang the market.

Citic Bank, BYD (1211.HK), China Telecom (0728.HK) are among a batch of firms due to report earnings later in the day. China’s official data over the weekend showed that Chinese manufacturers’ earnings growth jumped to 7.7 per cent in September year-on-year from a 5.8 per cent decline in August.

“Earning growth in the manufacturing sector could have turned the corner in September. Falling raw material prices this year will be a big positive, restocking will push up top-line sales which in turn will improve margins,” said Lu Ting, China Economist with Bank of America Merrill Lynch, said in an e-mailed note on Sunday.

On Friday, the Standard & Poor’s 500-stock index closed down 1.03 points, or 0.07 per cent, to close at 1,411.94. The Nasdaq Composite advanced 1.83 points, or 0.06 per cent, to end at 2,987.95. In London, the FTSE-100 Index closed up 1.66 points, or 0.03 per cent, at 5,806.71.

Hot Stocks of the Day:

Hong Kong developers

Anyone selling a flat within six months to a year of purchase will have to pay an extra 15 per cent stamp duty on top of the standard rate and 20 per cent if he or she sells within six months, Financial Secretary John Tsang Chun-wah said on Friday. Cheung Kong (0001.HK) and Sun Hung Kai Properties (0013.HK) may see a correction.

Chinese developers

Inventory turnover rate at 91 Chinese developers, a gauge to measure developers’ sales performance, increased by nearly 54.48 per cent in the third quarter compared with the level at June-end, China Securities Journal reported on Monday.

China Construction Bank (0939.HK), Agricultural Bank of China (1288.HK)

The country’s No 2 lender, posted a third-quarter net profit of 12 per cent to 51.9 billion yuan. That beat the estimate of 51.59 billion yuan in a Reuters poll and 51.9 billion yuan in a Bloomberg poll. Agricultural Bank of China also beats estimates, posting a 16 per cent jump in third-quarter net profit.

China Life (2628.HK)

The nation’s largest insurer by premiums swung to its first quarterly loss in four years as its investment returns got hit by sluggish domestic capital markets.

China Shenhua (1088.HK)

The country’s largest coal producer posted a 7 per cent drop in third-quarter net profit to 12.1 billion yuan due to the slowdown in Chinese economy. Yet it still exceed market estimate of 10.8 billion yuan in a Reuters poll.

Sinopec (0386.HK)

The refining giant said net profit for the three months ended September fell to 18.3 billion yuan from 20.2 billion a year ago, yet it is still above the 14.7 billion yuan forecast in a Bloomberg poll.