Investment Daily Note

US stocks mixed; Dow up 13 pts .

US housing starts were forecast-beating while the world’s biggest retailer turned in a set of disappointing quarterly earnings, causing a divergent trend on the US stock market. Dow closed at 18,312, up 13 points. S&P 500 closed at 2,127, down 1 point. NASDAQ closed at 5,070, down 8 points. ADRs fell in the US market, with their closing prices effectively putting HSI down 18 points, closing at 27,675. Rise of US Dollar put pressure on gold prices. New York gold futures settled at US$1,206.70/oz, off US$20.90. Oil prices also subsided. New York June crude oil futures closed at US$57.26/bbl, down US$2.17.

Market turnover lower; HSI to remain range bound in near term .

The Hang Seng Index eased at market open yesterday and was boosted by the Mainland market later on by 174 points at most to an intraday high at 27,765, last standing at 27,693, up 102 points. With little positive news to celebrate, market turnover continued to reduce and the HSI may find resistance at 28,000 and trade in the range of 27,200-28,000 points in the near term. Chinese financials were among the top performers yesterday, of which securities brokers made the sharpest gains. The State Council pledged for reform on share registration, as well as the development of a multi-layer capital market and a mechanism to transfer listing from one board to another. Initial public offering for H-shares of HTSC commenced yesterday, where Ma Huateng, chairman of Tencent, and Ding Lei, founder of NetEase, applied for subscription. Securities brokers were boosted, with CITIC Sec (6030.HK, HK$33.10) up 4% and Haitong Sec (6837.HK, HK$23.70) up 6%. Members of COFCO rose on renewed speculations of corporate restructuring, with China Agri (606.HK, HK$5.05), China Foods (506.HK, HK$6.27) and COFCO Packaging (906.HK, HK$6.00) up almost 6.5%, 5.4% and 4% respectively. As to individual stocks, Greentown China (3900.HK, HK$10.98) soared 7% upon increase in stake holding by China Communications Construction Group. China Comm Cons (1800.HK, HK$14.00) rallied 6% on reports that the company would restructure its property development business upon the acquisition of Greentown.