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Asian Market Review - October 11th 2010

Hong Kong’s Hang Seng Index and China’s Shanghai Stock Exchange Composite Index ended higher on Monday as worse-than-expected payrolls report last Friday boosted speculation that the Federal Reserve may finally provide quantitative measures to improve the economy. Hang Seng Index closed at 23,207.31 or 1.15% higher while SSE finished at 2,806.94, up 68.20 points or 2.49%.
Record sale of Japanese debt by the Chinese was not driven by political motives, according to a source from State Administration of Foreign Exchange (Pending:SAFE).
On Saturday, People’s Bank of China’s Zhou Xiaochuan said that the central bank will keep on monitoring economic data, especially to keep a tight control over the inflation. Several policy tools have been adopted by the government to curb inflation, such as increasing reserve requirement ratio and open market operations, but the impact has yet to be seen.
Bank of Taiwan, Taiwan Cooperative Bank, Mega Financial Holding Co. and First Commercial Bank are to sign memorandum of understanding with Bank of China Ltd. on yuan settlement services as well as staff training. According to the Apple Daily, BoC President Xiao Gang will sign the pacts in Taiwan this month.
China Petroleum and Chemical Corporation or Sinopec, is planning to build an 180,000 cubic meters of capacity oil storage base in Taizhou City, China.
Upgrades & Downgrades
·         Esprit Holdings was raised from HK$41.00 to HK$45.60 by Credit Suisse. Stance kept at NEUTRAL.
·         Sino Land has been raised from HK$23.70 to HK$24.20 by UBS.
·         New World Development target has been raised by Goldman Sachs to HK$18.60.
·         China Overseas Land has been put into Nomura’s Asia Pacific Conviction List as the house sees the developer will see an increased volume while maintaining decent growth in earnings despite risk that the property sector may not be favorable.

Disclosure: No positions