Mainland markets rise as FDI up for the first time in 11 months, real estate drags Hong Kong lower
Mainland markets rose, led by commodity shares, on the news that August saw the first increase of foreign direct investment to China in 11 months. Property shares led a slight fall in the Hong Kong market, which did not open until the afternoon session due to Typhoon Koppu.
The Shanghai Comprehensive Index climbed 0.23 percent to 3033.73. The SME Comprehensive Index added 1.18 percent to 4781.16.
The Hang Seng Index slid 0.31 percent to 20866.37. The Hang Seng Growth Enterprises Index climbed 0.67 percent to 647.70. The Hang Seng China Enterprise Index lost 0.01 percent to 12156.07.
Taiwan TAIEX Index advanced 1.23 percent to 7346.26.
Foreign direct investment in China rebounded in August, rising 7 percent from a year earlier after plunging over the previous two months, the Ministry of Commerce reported today.
Investment in manufacturing and other non-financial assets totaled US$7.5bn in August, Ministry spokesman Yao Jian said at a news conference. The figure does not include stocks and other financial assets.
Foreign direct investment in the first eight months of 2009 had shrank 17.5 percent from the same period last year to US$55.87bn, with July seeing just US$5.36bn of FDI, 36 percent less than a year earlier.
Mainland-listed nonferrous metal shares gained 3.8 percent on average after metal futures in Shanghai rose for the first time in five days.
Jiangxi Copper Co.(SH:600362;HK:0358), China's largest producer of the metal, gained 4.3 percent in Shanghai and 1.9 percent in Hong Kong after the Shanghai copper futures rose 1.9 percent. Chalco (SH:601600; HK:2600), the nation's largest aluminium producer, climbed 4.5 percent in Shanghai after Shanghai aluminium futures gained 1.5 percent.
Henan Zhongfu Industry Co. (SH:600595) and Henan Yuguang Gold & Lead Co. (SH:600531) both surged to the 10 percent trading cap.
Steel shares advanced 2 percent on average. Angang Steel (SH:;HK:0347), China's second-largest steel maker, climbed 2.04 percnet in Shanghai and 0.37 percent in Hong Kong. Liuzhou Iron and Steel Co.(SH:601003) surged to the 10 percent trading cap.
The Hang Sang Property Index dropped 1.01 percent to 26840.03, after an analyst with Minzu Securities told the China Securities Journal that the RMB90 trillion total value of Chinese residential properties is now more than three times greater than China's GDP.
Poly Real Estate Co.(SH:600048), China's second-largest listed developer, declined 1.18 percent. China Resources Land (HK:1109) lost 3.31 percent. Hengli Properties Development (HK:0169), a developer with projects in Changchun and Ningbo, dropped 4.1 percent.
The government-run English-language China Daily, however, claimed that the majority of Chinese people are still eager to participate in the property recovery. It said that massive infrastructure projects that raise the value of the land, China's unprecedented policy of loose bank credit, urbanization and a traditional love of bricks and mortar have all contributed to the recent rebound from last year's lows.
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