Hong Kong's Hang Seng Index fell 0.6% to 23,321 on Friday while China's Shanghai Composite Index remained virtually unchanged at 2,842. In Japan the Nikkei 225 Index inched up 0.1% to 10,178.
Shares in Hong Kong and China's big banks continued to slide today as investors awaited news of further measures to curb inflation. Banks have already restricted their lending and been subject to higher reserve ratios. Now some are calling for a rise in interest rates on customers' deposits. "To ensure stability and curb inflation, the government needs to compensate the savers, make them feel comfortable about their bank deposits," economist Andy Xie told Bloomberg. This is certainly a sentiment we in the West can identify with as we search for secure investments with actual returns. Xie recommends a rise in deposit rates of at least 3% over the next year.
Today Hong Kong-listed banks fell with Bank of Communications tumbling 1.7%, China Construction Bank diving 1.5%, Bank of China losing 1.2% and Industrial & Commercial Bank of China slipping 1%. Meanwhile, HSBC, the most heavily weighted bank on the exchange, managed a gain of 1.4%.
Investors Snap Up Gold
Word is that investors in Asia are snapping up gold to protect their wealth. An official from the World Gold Council told China Daily that China's investment in gold could hit 150 tonnes by the end of 2010. That includes all sales -- from Tiffany jewelry to gold Buddhas to bullion. Yesterday gold rose to $1,398.64, not too far from it's Nov. 9 record of $1,424.60 per ounce. Shares in Hong Kong-listed gold miners were mixed with Zhaojin Mining Industry surging 3.3%, Real Gold Mining inching up 0.3% and Zijin Mining declining 0.5%.
The surge in gold sales has piqued the interests of master counterfeiters, complicating matters for Hong Kong gold sellers. The Financial Times reported that a rash of sales of high-tech fake gold has hit the market in the form of items made of a sophisticated alloy coated in pure gold. Today shares in retailers selling gold items and jewelry plunged. Luk Fook Holdings sank 4.8% and King Fook Holdings dropped 3.7%.
Swire Pacific slumped 3.6% in today's trading. The company not only invests in property and bottles Coca-Cola, but is also a major shareholder in Cathay Pacific Airways. Cathay's brilliant service record is under threat by its pilot union, which could disrupt travel during the busy Christmas season by striking over pay. Shares in Cathay dipped 0.4%.
In China banking shares also fell with Agricultural Bank of China and Industrial & Commercial Bank of China both down 0.7%, China Construction Bank falling 0.6% and Bank of Communications receding 0.2%.
In Japan it was the stronger dollar, supported by a 10% surge in U.S. home sales that boosted some exporters. Canon racked up a 1.5% gain, competing camera maker Nikon climbed 1% and Casio Computer added 0.3%. Sony, however, declined 0.7% while rival game maker Nintendo advanced 0.4%. After the close it was revealed that Sony's PSP and PlayStation 3 game consoles outsold Nintendo's DS and Wii in Japan. Surely that will give gaming investors something to think about over the weekend.