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Hong Kong stocks rise on China stimulus plan
2008-11-10
HONG KONG - Hong Kong's stock benchmark advanced 3.5 percent Monday after China unveiled a $586 billion package to protect its economy from a rapidly unfolding global slowdown. The blue-chip Hang Seng Index gained 501.20 points to 14,744.63, though traded well off its highs. Investors welcomed the government's 4 trillion yuan ($586 billion) stimulus package, announced Sunday, which will offer a mix of spending, tax cuts and other measures in hopes of keeping economic growth from falling too fast. Demand from the U.S. and the country's other vital export markets has been waning as the global financial crisis takes an economic toll. "The global economy is in trouble and Chinese authorities understand that they can't wait anymore ... They're aware that exports next year will be terrible given the weakening economies in the U.S. and Europe," said Winson Fong, a Hong Kong-based managing director at SG Asset Management, which oversees about $3 billion in equities in Asia. "This has been overdue." Shares in companies across most sectors rose on expectations they would benefit from the stimulus package. Hopes of a wave of new construction projects powered building industry-related stocks higher. Cement producer Anhui Conch clocked an explosive 31 percent rally to HK$35.5, No. 2 steel maker Angang Steel surged 27 percent to HK$6.3 and Aluminum Corp. of China jumped 19 percent to HK$3.45 China Railway Construction climbed almost 20 percent to HK$10.7. An analyst downgrade from Morgan Stanley hit shares of China-based computer firm Lenovo, the world's fourth-biggest PC maker. It slumped 13.5 percent to HK$1.92. Hong Kong's interbank lending rate, known as Hibor, for three-month loans continued to slide, falling to 2.14 from 2.24. ____ On the Net: Stock Exchange of Hong Kong: http://www.hkex.com.hk
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