China Plan to Buy Hong Kong Stocks May Be Delayed, Wen Signals

Premier Wen Jiabao's comments on a plan to allow Chinese investors to buy Hong Kong stocks may signal a delay in its implementation, analysts said.

The government needs to study the risks, increase knowledge among Chinese investors and prepare regulations to protect the stock markets in Hong Kong and at home before launching the program, Wen said yesterday during a trip to Uzbekistan.

China's currency regulator on Aug. 20 said Chinese investors in the northern Tianjin city's Binhai economic zone will be allowed to invest in Hong Kong stocks with a Bank of China Ltd. account. Since then, the benchmark Hang Seng Index has surged more than 40 percent.

``The government has encountered difficulties to launch the plan and it will take some time,'' said Wu Kan, an analyst at Shanghai Securities Consulting Co., today in a telephone interview.

Liu Fuhua, a spokesman for China Securities Regulatory Commission, declined to comment today when contacted by Bloomberg News on the telephone.

``We don't expect a dramatic impact on Hong Kong stocks, as the market already anticipated a delay in the launch of the `through-train' program,'' said Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong, today in a telephone interview.

China is easing curbs on capital outflows as it battles with surging inflows that lead to higher inflation, soaring stock and property prices and excessive factory investments.

The current-account surplus, a gap for trade in goods and services, widened 78 percent in the first six months of 2007 from a year earlier to $163 billion. The capital and financial account, a measure of investment flows, almost tripled to $90 billion.

The State Administration of Foreign Exchange last month pledged that it will relax limits on capital outflows.

``It's a matter of time,'' said Liao Qun, chief economist at Citic Ka Wah Bank in Hong Kong, today in a telephone interview. ``The `through-train' will come, but the Chinese government is cautious and therefore it needs an extra few months for preparation.''

China's economy, the world's fourth-largest, expanded 11.5 percent in the third quarter from a year earlier. Fixed-asset investment in urban areas climbed 26.4 percent in the first nine months, up from the 24.5 percent pace in the whole of 2006.

Even as inflation slowed to 6.2 percent in September from a peak of almost 11 years on smaller food price gains, it still exceeds the key one-year bank deposit rate of 3.87 percent. That encourages households to switch savings into stocks and real estate.

The benchmark CSI 300 Index of shares has soared 168 percent this year. Property prices in China's 70 major cities jumped 8.9 percent in September from a year earlier, the biggest since records began in August 2005.

To cool the world's fastest-growing major economy, the People's Bank of China has raised interest rates five times, ordered lenders to set aside bigger reserves and sold bills to drain cash from the financial system.

``We agreed with Premier Wen that the `through-train' should be launched at the right timing,'' H.F. Wong, a spokesman for the Hong Kong Monetary Authority, said today. ( Bloomberg )

Greece exploring ways to further diversify bilateral trade with Turkmenistan
Greece exploring ways to further diversify bilateral trade with Turkmenistan
Detailed look at Turkmenistan's development of agriculture sector (2020 - May 2021)
Detailed look at Turkmenistan's development of agriculture sector (2020 - May 2021)
Turkmenistan interested in expanding co-op with Russia’s Lipetsk region
Turkmenistan interested in expanding co-op with Russia’s Lipetsk region
Loading Bars
Latest
Kazakhstan unveils its trade structure with EAEU countries for 1Q2021
Greece exploring ways to further diversify bilateral trade with Turkmenistan
Iran's Ministry of ICT to provide free internet for presidential candidates
Iran lifts steel ingots export ban
Azerbaijan, Germany implementing joint agricultural projects
Iran declares amount of loans issued in Fars Province
Detailed look at Turkmenistan's development of agriculture sector (2020 - May 2021)
Tourism potential of Azerbaijan's liberated Shusha at int'l exhibition in Dubai (PHOTO)
Ports and Maritime Organization of Iran seeks tax exemption for Chabahar port
Azerbaijan discloses insurance fee for rice fields
Abu Dhabi shares at record high, shrugging off Israel-Palestine tension
Israel's import of Turkish chemicals spikes in value
SOCAR Ukraine temporarily suspends premium fuel sales
Britain to hold meeting to encourage global COVID vaccine take-up
Azerbaijani agrarian agency signs tender to attract judicial services
Purchasing of rapeseed from farmers in Iran continues
CPI up 0.3% in April, well below expectations
Uzbekneftegaz shares data on shipment of sulfur products
Russia’s COVID-19 spread rate surpasses 1 for eight days in a row
Disney World and other U.S. theme parks update mask rules
Troops of Azerbaijan's Nakhchivan garrison to launch new command-staff exercises
Share of non-performing loans in Georgia doubles
EU allocates financial aid for programs in support of Georgian private sector
Government Trading Corporation of Iran unveils volume of wheat purchased from farmers
Iran's free trade zones require private sector investments - President Rouhani
Volume of cargo loaded, unloaded in Iran’s Anzali port decreases
Azerbaijani parliamentary delegation leaves for visit to Italy
Bitcoin rises 5.6% to $49,337.72
Most temples belonging to Udi people are either in ruined or dilapidated condition. Therefore, we will restore them too - President Aliyev
Iran's launches supercomputer
Proxy advisor ISS recommends votes for Chevron CEO, directors
WB talks growth of lending to Azerbaijan's economy
Saudi Arabia's national airline to resume flights to Georgia
Uzbek commodity exchange notes decrease in prices for cotton seeds
Udi people have great historical heritage - President Aliyev
Georgian FM to pay official visit to Kyiv
Iran’s East Oil & Gas Production Company boosts gas extraction
Biggest share of Azerbaijan's GDP accounts for industry
Turkmenistan interested in expanding co-op with Russia’s Lipetsk region
Azerbaijani Armed Forces continue exercises, moving to operational areas (VIDEO)
Georgia sees increase in COVID-19 cases
Iran reveals COVID-19 data for May 16
Russian airline expanding route of flights in direction of Baku
Azerbaijan expected to approve another int'l document on migration issues
Iran government increases pensions
Retail trade indicators up in Kazakhstan
Physical volume of Kazakhstan’s GDP down in 1Q2021
Turkmenistan, Iran talk over increasing sea transportation in Caspian Sea
Ministry talks social benefits paid out to population in Azerbaijan since early 2021
GDP per capita increases in Azerbaijan
Azerbaijan discloses amount of trade surplus for 1Q2021
Azerbaijan creating industrial clusters to develop metallurgical industry
Facilities to be put into operation at Iran's Ilam Airport
Fitch Ratings shares forecast for Azerbaijan's 2021-2022 external public debt
Baku Higher Oil School hosts webinar ‘Women in Engineering: Challenges and Opportunities’ (PHOTO)
Batumi International Airport of Georgia receives first passenger flight after reconstruction
Azerbaijan's Azerishig to purchase metal structures
Russia reports 8,554 COVID-19 cases over the past day
New type power units at Uzbekistan’s Turakurgan TPP to increase electricity production
UAE airlines Etihad, flydubai cancel Tel Aviv flights
Kazakhstan's int'l reserves grow
Georgia introduces new requirements for registration of trucks, buses, and minibusses
Third oil loading berth for Turkmenistan’s Turkmenbashi oil refinery under construction
Monument to famous Azerbaijani singer to be soon installed in Baku (Exclusive) (PHOTO)
Value of coupon payments to investors in Azerbaijan soars - National Depositary Center
Uzbekistan reveals companies interested in construction of solar power plant in Surkhandarya region
Carbon neutrality in 2045 requires managing increasing quantities of decarbonized biogas
UK to make final lockdown easing decision on June 14
French company eyes to co-op with Uzbekistan in using new technologies in agriculture
Bollywood: Big B buys oxygen concentrators, donates ventilators
Germany to finance implementation of projects in Uzbekistan in several areas
Direct delivery of Uzbek export goods to Pakistan implemented through Afghanistan
Uzbekistan, Tajikistan eye increasing trade turnover
Airport in Uzbekistan opens tender for supply of towbar
Cargo movements in Iran’s Chabahar port down
Uzbek finance ministry becomes sole shareholder of Uzbekistan Railways
Uzbekistan eyes attracting Japanese companies for joint production of branded footwear
Airport in Uzbekistan to buy spares for vehicles via tender
Azerbaijan enhancing information security of banks
Weekly review of Turkmenistan’s exchange
Iran’s CBI discloses amount of currency sold at NIMA exchange rate
One of violators of Azerbaijan's state border arrested - Prosecutor General’s Office
Munitions found in Azerbaijan's Khojavand district
Tesla crash victim lauded 'full self-driving' in videos on Tiktok
Central Bank of Azerbaijan unveils volume of lending to government agencies
Azerbaijan sees increase in gold price
Azerbaijani cotton processing plant undergoing reconstruction
ACG oil transshipment from Ceyhan terminal exceeds 75 mb YTD
Azerbaijan demonstrates high growth rates in mobile infrastructure dev't - GSMA Association
Second Sputnik V shipment delivered in India
Israeli, Palestinian delegates to attend UN Security Council’s meeting on May 16
Kazakhstan increases imports of Switzerland-made goods
Georgian Nadi Group Ltd snail farm increases production
Georgia researching manufacturing of airplane parts and repair services
Georgian Dzuguri company to resume production of mineral water
Austria's 4M2021 import value of Turkish grains grows
Azerbaijan boosts import of Turkish-made chemicals
Uzbekistan, Dominica establish diplomatic relations
Turkey sees increase in exports of electrical goods to Georgia
Azerbaijani currency rates for May 16
All news