Asian Market Review – August 24th 2010

Nikkei Tripped Below 9K, Hang Seng Fell

Hong Kong and Japanese shares sunk in the red as investors steered clear away from the market ahead of the housing data due on Tuesday, coupled with renewed yen’s strength. Hang Seng Index slumped 230.30 points to end at 20,658.71 while Nikkei 225 index fell 1.33% to 8,995.14, piercing the psychological 9,000 level. Shanghai composite however, edged up 10.94 points to 2,650.31.

At the bottom, Nikon Corp lost 4.02%, Tokyo Electron fell again by 3.76%, and Sony Corp. tumbled 3.72%.

Sony Corp. reportedly has planned to join Sumitomo Mitsui Finance and Leasing in a general leasing venture. Sony will have 34% stake, while Mitsui holds the rest of the stake.

Meanwhile, Toyota predicted that sales will grow in China by over 10% next year. This year’s target of 800,000 units is also expected to be achieved. Toyota fell 0.83% as it settled the day at ¥2,980.

China Resources, Hang Lung Properties, and Wharf Holdings gained 1.29%, 0.88%, and 0.85%, respectively, thus averted them from the red zone where most HK shares were at on Tuesday. In contrast, CITIC Pacific, China Mobile, and Cheung Kong Holdings were at the bottom with 2.4%, 2.14%, and 2.07% losses, respectively.

Following up the takeover news of South African lender Nedbank by HSBC, the shares of HSBC fell 1.49% to end at HK$76.00. Despite the fall, the deal may benefit HSBC as the trade relationship between China and Africa is seen to grow as China imports of commodities from Africa to support its economic expansion.

Cheung Kong Infrastructure Holdings and HK Electric shared 40% each of a consortium offering £5.78 billion for three electricity distribution networks in UK operated by the French Electricite de France. CKIH fell 0.66% to HK$29.90, and HK Electric dropped 1.04% to HK$47.40.Li Ka-Shing will hold the rest of the stakes (20%) in the consortium.

HK & China Gas Co. reported a decline in net profit to HK$2.97 billion from HK$3.00 billion in prior year. Revenue increased however, to HK$10.41 billion or 66% from HK$6.26 billion. The shares fell 1.79% to HK$18.68.

Ping An also reported its earnings for H1 on Tuesday. The insurer’s net profit jumped 28.5% from 7.477 billion yuan to 9.611 billion yuan. The consensus was for a net profit of 7.9 billion yuan. EPS was 1.30 yuan vs. 1.02 yuan a year ago, while total income amounted to 96,980 million yuan against 75,171 million yuan in H1 2009.

Another company reporting on Tuesday in Hong Kong was the port operator Cosco Pacific. Net profit was said to have increased 82% to US$189.9 million from US$104.5 million in prior year. Revenue was 40% higher at US$222.7 million from US$159.0 million. Dividend was set to HK$0.137 vs.HK$0.144 last year. Cosco ended at HK$10.32 or 0.39% higher.