China Gains in Billionaires, and also Inflation; Buffett's BYD Co. Shares Surge

In Asia Thursday Japan's Nikkei 225 Index gained 1%, ending the session at 10,665. In Hong Kong the Hang Seng Index inched up 0.1% to 21,228 and China's Shanghai Composite Index added 0.1% to close at 3,051.

China reveled as the newly released Forbes Rich List shows that 64 Chinese have made it onto the roster of the world's billionaires. Headlines in the China Daily proclaimed "China ranks No 2 on Forbes billionaires list." The only country with more billionaires is the U.S.

But celebrations were tempered by worries that China is suffering from inflation. Data released by the National Bureau of Statistics indicate that consumer prices rose 2.7% in February, proving that stimulating the economy by dumping enormous amounts of cash into the market is not without risk -- although it has done a good job of boosting the economy.

Today, shares in Chinese automakers slid lower. Anhui Jianghuai Automobile, which exports light trucks, plunged 4.7%, FAW Car, specializing in passenger cars dived 3.3% and SAIC Motor plummeted 2.9%.

Real Estate companies also lost value today; if the country begins to restrict lending, it will become much tougher for ordinary Chinese to scrape together cash to buy homes. Gemdale Corp., which has projects throughout China including planned communities in the suburbs of smoggy Shenzhen with easy access to the manufacturing center, sank 1.2%. China Vanke dipped 1.1% and Poly Real Estate fell 0.7%.

In Hong Kong, the property sector also closed lower, since the threat of less liquidity in the hands of Mainland customers would limit the number of property speculators who have been buying and flipping Hong Kong properties, helping to heat up the market. Evergrande Real Estate plunged 2.1%, Henderson Land tumbled 1.3%, New World Development fell 1.1%, Sino Land and China Overseas both dipped 0.5%. Hang Lung managed a 0.7% increase.

Major Hong Kong retail shares rose today. Li & Fung, which will soon be announcing it's final results for 2009, surged 3.1%. Esprit Holdings climbed 1.8%.

Warren Buffett-backed BYD Co., which makes electric cars, skyrocketed 5.7% today, making its chairman, chairman Wang Chuanfu, even richer. Wang came in number 189 on the list of billionaires with $4.4 billion to his name. Great Wall Motor spiked 6.2% and Geely Automobile rose 3.7%, adding to the fortunes of its chairman, Li Shufu, who also made it onto the billionaires list.

In Japan, speculation that the economy is reviving propped up retailing shares. Gargantuan retailer Aeon, which runs supermarkets, convenience stores and department stores, surged 3.8%. Marui Group, a department store operator, gained 3.1%, J. Front Retailing advanced 2.2% and UNY and Takashimaya both rose 1.6%.

Japanese property companies closed higher today with Tokyu Land Corp. rising 2.1%, builder Kajima Corp. gaining 1.9% and Heiwa Real Estate up 0.7%. Perhaps a real improvement in the economy will be reflected in Japanese profits made at home, and not only through the sale of exports abroad.