Chinese Stock Markets Rebound, Advances For Third Day
Stock bidders ran rampant for the third day in Shanghai, taking key indexes higher in the region. Boosting positive sentiment was speculation that a capital gains tax would not be implemented in the short term in order to curb inflated buying in the market. According to the Shanghai Securities News, the government is unlikely to impose such a measure considering the fact that overall governance doesn?t allow for such a levy on share trading. Citing Liu Jipeng, professor at the Capital University of Economics and Business, the state run newspaper stated that concerns over the tax are “ridiculous” and “based on ignorance”. The statements can, and usually are, be considered underlying confirmation as the newspaper remains an outlet for governmental policy disclosure.
China Trade Surplus Comes Into Focus
China?s trade report is likely to come back in to focus as traders and investors await the release of the monthly assessment. Unfortunately, for Chinese policy officials, estimates are pitting a 40-50 percent increase in the trade surplus from a year ago as exports continue to support the world?s fourth largest economy. The trade surplus is likely to have swelled to $19.5 billion from a year earlier figure of $13 billion, bringing the trade balance for the first five months of the year to $82.8 billion and higher by 78 percent. Should the estimates ring true, the growing surplus would once again catapult US-Chinese trade tensions in to the limelight. Incidentally, the report coincides with comments made by US Treasury Secretary Henry Paulson earlier in the week. Commenting on US-China trade relations, Paulson noted that protectionist measures are on the rise in both countries and will likely erode at already heightened tensions between parties. In the past month, US regulators have already branded certain Chinese products dangerous such as toothpaste and children?s toys.
Amazon Increases Investment In Joyo
Yet another US company looks to increase investment in China, and that company is the online seller Amazon.com. Today, company officials released that the US company will increase its investment in the acquired Joyo.com, one of the leading online shopping websites in China. Attributed to the increase in investment stems from the fact that Joyo has been on a tear since Amazon purchased the China based company for $75 million in 2004. Incidentally, the investment is set to potentially boost Amazon?s overall earnings, with 54 percent of the company?s sales being outside the United States.
Stock Markets In Singapore and Hong Kong Continue Lower
Regional stock markets fell on the session, despite the retracement in Shanghai share demand. Singapore?s stock market declined for the third straight day, the longest losing streak for the benchmark in almost three months. Dampening speculation on the bid side was concern that global liquidity tightening may dry up demand for equity investments. As a result, the Straits Times index fell 17.42 points to 3,546.33 at the close. Keppel Corp., the world?s largest oil rig builder, slipped 2.5 percent in intraday trading, closing the session at S$11.50 and leading decliners on the day. Comparatively, the Hang Seng Index declined under the same reasoning, dipping down 18.45 points to 20,800.16 at the close of the session. However, shares of Cnooc helped to stem the declines as it was rumored that the company, China?s largest offshore oil producer, was contemplating a share sell. Stock in Cnooc Ltd. rose 21 cents or 2.6 percent to HK$8.28.