Reports » China

China stock market report by ChinaStockAdvice.com (May 7, 2009)

Macro-economic Policy

The State Council Approved Shanghai Nanhui District to Combine with Pudong New Area

New Credit of Four Banks Reported Rmb220bn in April

 
Monetary Policy Report of People?fs Bank of China Said Foundation of Macro-economy Rebound Being Not Firm

Domestic Market

Report of People's Bank of China Actively Responded to Market Surge

Hang Seng index closed high by 404.49 points or 2.46% at 16834.57 points.

Financial sub-index outperformed Hang Seng index.

Hong Kong local property shares developed respectively.
 

Global Markets

S&P 500 closed high by 15.73 points or 1.74% at 919.53 points. 

Variation of ADP employment obviously turned better and performed above expectation.

Retail sales continued declining in Eurozone.

Australia enjoyed favorable balance of trade for consecutive three months.

As of May 1, 2009, American MBA mortgage loan purchase index of current week was fixed at 264.3, and last time it was 251.6. Meanwhile, MBA mortgage loan application index was 979.7, and last time it was 960.6; MBA mortgage loan refinancing index was 5169.3, and last time it was 5108.2, refinancing function of housing loan market was under recovery.
 
In April, PMI service index was forecasted at 43.1 in the Euro-zone, and the real data was 43.8; change was not obvious although the error had been taking into consideration. In April, composite PMI was forecasted at 40.5, and it settled at 41.1, which was a slight variation. Economic recovery period of the Euro-zone might be half year behind that of America.
 
British PMI service index in April was predicted at 46.3, and it was 48.7 for real, while last time it was 45.5.
 
German PMI service index in April was predicted at 43.5, and it was 43.8 for real, while last time it was 43.5.

French PMI service index in April was predicted at 46.2, and it was 46.5 for real, while last time it was 46.2. 
 

Companies & Industries

- Global Ship Indent in First Four Months of 2009 Saw Year-on-year Decrease of 97.6%; Ship Price Touched the Bottom Again

- Central Government Allocated Rmb20bn Special Funds for Technology Upgrade, Influence Being Not Big to Logistics Listed Companies

- Shenzhen Energy Group (000027): Reduced 45.22mn Shares of Guangdong Shaoneng Group (000601)

Real Estate Industry:

- The State Council Approved Nanhui District to Combine with Pudong New Area; State-owned Real Estate Shares in Districts of Lu Jiazui of Pudong New Area Might Benefit

Machinery & Metal Industry:

- Guangzhou Iron & Steel (600894): Holdings Reduced by Two Largest Shareholders

- Yunnan Tin (000960): Second Dividend Payment of Convertible Bond to Be Rmb14.31mn

- China North Optical-Electrical Tech (600435): Non-public Shares Issuance Conditionally Passed by CSRC

IT Industry

- Communication Equipment and Mobile Phone Export Continued Declining in March 2009

- ZTE Adjusted 6 Marketing Departments, Aiming at European and American Markets

- Sanan Optoelectronics (600703): Signed Framework Aggrement with Qinhai Electric Power Corporation on Solar Power Station, Being Favorable to Long-term Development

- Wuhan Yangtze Communication Industry (600345): Asset Restructuring Ceased; Share Price Likely to See Short-term Fluctuation

Consumer Goods Industry

- Guangzhou Grandbuy (002187): Purchased House Property and Equity by Connected Transaction, with Little Impact

- Henan Rebecca Hair Products (600439): Large Shareholders Reduced Holdings Again within 2009

- Huafang Limited Company (600448): 2008 Annual Report-Related Proposals Passed at Board of Directors, with No Significant Event

Central Bank Likely to Lower Required Reserve Ratio - Commentary on Executive Report of Q1 2009 Monetary Policy:

People's Bank of China released Executive Report of Q1 2009 Monetary Policy on May 6, 2009.

Comment:

1. Foundation of economic recovery is not solid;

2. Required Reserve Ratio is likely to be lowered;

3. Inflation risk stays above the deflation risk;

4. As stated in Executive Report, Central Banks of America, Japan, British and Switzerland adopt the irregular monetary policy featured loose quantification, which will impact on the bond market. Viewed from mid-long term, factors like inflation anticipation strengthening, interest rate rally and liquidity of Central Bank will cause sharp fluctuation in bond price with stabilization of financial market and economic recovery.