Hong Kong Market Wrap/Europe Morning View 27 Sept 2010

Hong Kong/China/Japan

HSI: +1.00%, HSCEI: +0.80%, SHSE: +1.41%, NIKKEI: +1.39%

Asia market closed higher, as expected. Big gainers in the HSI includes Tecent (700.HK, +5.04%), Sino Land (83.HK, +4.80%), China Resources (291.HK, +4.24%), and Foxconn (2038.HK, +3.95%). Sun Hung Kai Properties was +2.92%, breaking 52-week high.

Although property developers stocks do well, Cheung Kong is launching their new apartments project at lower than market prices. Why?

A good read:
Chinese Property Bust Is Morphing Into a Slow LeakSource: Bloomberg

In April, I told readers I would let them know when China’s property bubble was about to burst. The market has now peaked. It will trend down gradually for the rest of the year. When expectations of a yuan revaluation reverse and capital outflows ensue, probably in 2012, the market will deflate faster.

Europe

Europe early trading is slightly higher, and US futures is higher now. Though the new data might not look very good. New data from Hometrack suggests that UK home prices decline in September by the most in 18 months. On the other side of the English Channel, Euro falls on concern over European banks. Your author has previously suggested that European banks were over-leveraged and the deleveraging process did not start a year ago. Now we know Deutsche Bank need to raise capital. Who know which banks need more to deleverage themselves and to prepare the implementation of Basel III?

News

Unilever pays $3.7bn for Alberto Culver
Unilever is to buy Alberto Culver, the US-based consumer goods company, for $3.7bn (£2.3bn) in a deal that will bring brands such as TRESemmé and VO5 into the Anglo-Dutch conglomerate’s stable of haircare and skincare products. Source: Financial Times

Germany backs tough EU deficit rules
The German finance minister has thrown his weight behind a European Union proposal for tough new rules and fines against member countries that fail to get their fiscal houses in order, setting up a showdown on Monday at a high-level meeting of his counterparts in Brussels. Source: Financial Times

Milibands risk split over deficit
Ed Miliband has offered his brother, David, the post of shadow chancellor, in a move which could set up a bruising early dispute at the top of the party over Labour’s approach to tackling the deficit. Source: Financial Times

Belgium’s Bond Yields Increase More Than Ireland’s in Political Paralysis
Belgium’s borrowing costs relative to those of Germany are rising at the fastest rate in the euro area as a leadership vacuum undermines efforts to cut the region’s third-biggest debt burden. Source: Bloomberg

For more news and analysis, visit Also sprach Analyst. Follow us on Twitter and Facebook.

Get our daily email update FOR FREE!

About Zarathustra

Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.