Drop in Oil Prices Hit Hong Kong Stock Market
Published By : 20 May 2015 | Published By : QYRESEARCH
Share prices in the Hong Kong stock market declined by mid-session on Wednesday, May 20, 2015 morning as the weakness in Chinese oil majors offset the gains posted by banking and manufacturing script after Beijing announced a 10-year strategic plan to support the upgrading of the manufacturing industry of the country.
The benchmark Hang Seng Index lost 0.20%, or 55.17 points, to a total of 27,638.37, although the Hang Seng China Enterprises Index added 0.47% to a total of 14,258.06. The Shanghai Composite Index added 1.33%, or 58.54 points, to a total of 4,476.09.
Mr. Winnie Chiu, the senior director with Markets & Investment Solutions at the Credit Agricole Private Banking, stated that from a valuation perspective, the A share market in China is trading at a par with that of the US, but if considering China, the story is totally different. Here, H shares are trading at just over 10 times, so there is still a huge discount to historical average.
Chinese oil companies retreated as oil futures fell in New York overnight to US$57.26 per barrel and a Goldman Sachs report forecast the price of oil could drop to as low as US$45 per barrel in October.
CNOOC fell 1.13% to US$1.58, a one-month low. State Council of China announced the China Manufacturing 2025 plan on Tuesday, May 19, 2015, that outlined nine strategic focal areas to develop in the manufacturing sector in China by 2025, including aerospace tools, information technology, marine engineering devices, bio pharmaceutical, rail transportation devices, agricultural machinery, and energy saving automobile among others.