Wednesday, October 08, 2008
China shares fall; banks, insurers lead decline
SHANGHAI, China - Chinese stocks have fallen as investors spooked by the global financial crisis unloaded insurers and other financial shares.
The benchmark Shanghai Composite Index <.SSEC> lost 65.61 points, or 3 percent, on Wednesday to close at 2,090.37.
The index dipped more than 4 percent late in the day but regained some losses by the time the market closed.
Among the biggest decliners, Ping An Insurance (2318.HK: Quote, Profile , Research) (601318.SS: Quote, Profile , Research) fell 9.2 percent to 29.00 yuan while China Life (601628.SS: Quote, Profile , Research) (LFC: Quote, Profile , Research) (2628.HK: Quote, Profile , Research) dropped 9.1 percent to 20.82 yuan.
Shares in gold miners surged, with Zhongjin Gold hitting the 10 percent upside limit at 35.20.
AP
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Wednesday, October 08, 2008
China suspends tax on interest income-state TV
BEIJING, Oct 8 - China's cabinet has decided to temporarily scrap the withholding tax it levies on interest income, state television said on Wednesday.
The broadcaster did not provide details on when the move would take effect. The tax is currently 5 percent.
Reuters
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Wednesday, October 08, 2008
China 3-mth bill yld seen down 4 bps at sale
SHANGHAI, Oct 8 - China's central bank is expected to auction 15 billion yuan of three-month bills in its regular open market operations on Thursday at a yield of 4 basis points lower than the level at its last auction, traders said on Wednesday.
Most had expected the yield to come in about 3.32 percent, down from the 3.3570 percent seen at the last three-month bill auction, after the central bank on Tuesday let the one-year bill yield to tumble by nearly 10 bps to 3.9069 percent at auction, in what traders took as a sign of imminent easing of monetary policy.
"The three-month bill yield is likely to fall at tomorrow's auction after recent drops in secondary market yields," said a trader at a Chinese bank in Shanghai.
However a few traders had predicted the auction yield would stay flat from last week because the global financial crisis was making big Chinese banks reluctant to lend funds in the money market, hurting investor demand for short-term bills.
A total of 162 billion yuan in central bank bills and repos are due to mature during the two-week period to this Friday. China's financial markets were closed last week for a national holiday.
Including China's latest 1.0 percentage point cut in reserve ratios for smaller banks, which took effect on Sept. 25, the bank conducted a net injection of about 226 billion yuan into the market before the holiday.
Reuters
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Wednesday, October 08, 2008
China's Alibaba Group to invest 5 bln yuan in Taobao
BEIJING, Oct 8 - The parent of China's top e-commerce firm Alibaba.com (1688.HK: Quote, Profile , Research) said on Wednesday it would invest 5 billion yuan in its online auction unit Taobao over five years to build its business.
Alibaba Group said the investment -- an additional 3 billion yuan on top an earlier 2 billion yuan injection -- would go towards adding people, equipment and improving technology at the firm known as China's eBay Inc. (EBAY: Quote Profile Research).
However, the five-year old Taobao, which executives said broke even for the first time in August and could turn a profit next year, will continue to offer its services for free to buyers and individual sellers.
"We have never made making a profit a central goal for the company," Daniel Zhang, the chief operating officer told reporters. "Rather, we are looking to improve service and provide a better platform for customers."
But some Alibaba investors balked at the large investment in a loss-making unit when uncertainty and risk are overwhelming global stock markets.
Alibaba's Hong Kong-listed shares slumped 15.8 percent on the day, underperforming the 11.5 percent fall on the China Enterprises index of mainland H shares <.HSCE>.
Reuters
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Wednesday, October 08, 2008
Hundreds of HK investors protest Lehman-bond mis-selling
HONG KONG (AFP) - - Furious investors clashed with police outside Bank of China's Hong Kong headquarters Wednesday and demanded the repayment of investments linked to failed US bank Lehman Brothers.
Scuffles erupted outside the Bank of China building, as protesters tried to push through the police's barricade, an AFP photographer at the scene said.
Hundreds of protestors also swarmed other major banks and the city's legislature, grabbing lawmakers and demanding help to recoup their money.
The protestors, who complain that the banks which sold them the so-called "mini-bonds" had not fully explained the risks involved, held placards and shouted slogans to demand a full refund of their investments.
Lawmakers promised to do all they could to pressure the government to take more aggressive action against the banks.
Wong Kin-ming, a retired hawker who had put his entire savings of 2.52 million Hong Kong dollars (320,000 US) into the bonds, said his financial advisor at one major bank told him there was no risk in the investment.
"He told me I would not lose my principal no matter what happened. Tell me what that is if it is not deception?" Wong said.
AFP
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