Asian markets: Goldman pumps up Geely stock
Stocks in Asia were mixed Wednesday, with several markets still closed for the holidays, including those in Japan and Indonesia. Hong Kong's Hang Seng Index closed down 0.5 percent to close at 21,596 despite some fantastic performers.
Trading was extremely active in Geely Automobile Holdings Ltd., which surged 19 percent on the news that a fund managed by Goldman Sachs Group Inc. will invest $334 million in the Chinese car company. Investors may be hoping for success on the scale enjoyed by Chinese electric carmaker BYD Co. Ltd. after a major investment by Warren Buffett last year led to a five-fold increase in the company's value. And it may be a good bet: according to China Daily, Geely is planning to double the number of cars it produces to 685,000 in the hope of cashing in on increasing demand from China's expanding middle class.
Hong Kong lenders suffered losses, with BOC Hong Kong Holdings Ltd. falling 2.8 percent and Bank of East Asia Ltd. losing 1.6 percent. Standard Chartered Plc announced it will stop offering discounted mortgage rates to customers, and its share price dipped 1.2 percent. Standard Chartered has been in the news recently -- especially in the U.K. -- after unveiling a four-year deal to sponsor the Premier League's Liverpool Football Club to the tune of £80 million.
In China, the Shanghai Composite Index lost 1.9 percent, ending the day at 2,842 with shares in steel companies continuing to suffer. Tangshan Steel fell 3.9 percent after its parent company, Hebei Iron & Steel Group, cut October prices for reinforcing bars used in building construction by 10 percent. Angang Steel Co., also fell 1.6 percent and Laiwu Steel Corp slumped 4.6 percent. According to Reuters, Chinese steel stocks are down 20 percent since August as supply has outpaced demand.
Their woes are a sign that the economy is still struggling, even though investor enthusiasm has been on the rise.