HSBC shares rise on spectacular third quarter profits, Hong Kong chip maker surges

In Asia Wednesday, Hong Kong's Hang Seng Index rose 1.6% to close at 22,627. In Japan, the Nikkei Index closed at 9,872, virtually unchanged from yesterday. In China, the Shanghai Composite Index dropped for the first time in nine days, ending the day at 3,175 -- a loss of 0.1%.

In Hong Kong, HSBC Holdings (HBC), the index's most heavily weighted stock, climbed 6% after announcing that its third quarter pre-tax profits were higher than last year, and had exceeded even its own expectations. The bank, which has its headquarters in London, serves more than 100 million customers throughout the world. The bank's CEO plans to relocate to Hong Kong this February, signaling that operations will become more focused on the East.
Bank of East Asia (BKEAY) soared 15.2%, on rumors that Guoco Group may make an offer to buy the bank. Last week the investment holding company raised its stake in the bank to 8%, making it the lender's second-largest shareholder, according to the Wall Street Journal.

Chipmaker Semiconductor Manufacturing (SMI) rocketed up 73.9% in Hong Kong today, after its CEO and founder resigned and a replacement was announced. The Shanghai-based company also announced a $200 million legal settlement with a Taiwanese company, settling a dispute that may have precipitated Chang's resignation.

In China, carmaker Chongqing Changan Automobile Co. leaped to its 10% daily maximum. Chongquing Cangan is the Chinese partner of Ford and Mazda and its parent company now plans to take over the carmaking divisions of Aviation Industry Corp. of China which makes military and civilian airplanes.

Chinese real estate companies slid today, after racking up spectacular gains so far this year. Poly Real Estate Group lost 1.4% and China Vanke (CVKEF) slipped 1.3%.

A weakening dollar sent most Japanese stocks lower, with stainless steel maker Pacific Metals (PFMTF) plummeting 5.5% and retailer Aeon (AEOH) sinking 5%. But the index benefited by Fast Retailing (FRCOY), which gained 1.4% today, rising to its highest value so far and overtaking Seven & I Holdings, owner of 7-Eleven, in market value, according to Bloomberg. Fast Retailing shares have risen 30% so far this year, with its trendy chain of Uniqlo stores outpacing sales of, and probably stealing customers from, other shops that are still feeling the pinch of the global recession.

Nintendo (NTDOY), which makes nearly 90% of its sales abroad, slumped 1%, despite reporting a 57% increase in U.K. sales during last week alone, spurred by excitement over the debut of the Black Wii Sports Resort Pack. Sony (SNE), which makes the popular Playstation, lost 1%. As we enter the holiday season, we'll be looking for a spike in sales across the board, which may push shares in Japanese electronics companies and retailers higher.
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