HK Stocks Advance On Banking Shares, ICBC Leads Way

[B]Stocks [/B]in Hong Kong advanced on the day, led by gains in the banking sector. Notably, shares were led higher on gains in ICBC, Industrial & Commercial Bank of China Ltd. China’s first ranked lender added to positive market sentiment after reporting first quarter profit that well exceeded analyst estimates. For the first three months, posted profit was 18.7 billion yuan as demand for loans coupled with rising stock market valuations in lifting the figure. Shares of ICBC advanced 1.2 percent on the day, closing at HK$4.36. Cnooc sharers were also bid throughout the day as crude contracts continued higher during London. Shares of China’s biggest offshore oil producer rose 5 cents to HK$6.81. As a result, the Hang Seng index was able to add an impressive 130.51 points to close at 20,667.29.

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[B]The Chinese Yuan [/B]pulled back a bit as the country’s central bank fixed the reference rate to a weaker exchange compared to yesterday’s close. The move suggests to the market that policymakers are hoping to contain the value of the underlying currency, moving it in line with other Asia regional currencies. Incidentally, the decision is also a bold move as it conveys what everyone is thinking: China will move on its own timetable and not at the request of the world’s. However, policy changes may come about as senior officials are set to visit Washington May 22-24 for the second round of talks with US Treasury Secretary Henry Paulson. In attendance will be Wu Yi, China’s senior trade official. According to the China Foreign Exchange Trade System, the underlying currency fell to 7.7263 in the overnight session.