Serendipity or savvy?

Posted on Thursday, 30 September 2010 [GMT +1]

The Yuan weakened on the day after the US House of Representatives voted overwhelmingly (348-79) to try and bash China i.e. it has agreed to seek measures which will allow domestic companies to petition for duties on imports from China, so as to compensate for the effect of a weak Yuan. Serendipity or savvy? The smart money is on the latter and the second-to-smart-money says that this is toothless legislation.

Much more interesting is the rally of developers share prices (+3.1% by morning tea-time) in China on the back of an imminent property tax trial and associated price-dampening legislation. Share prices went up, of course, because the measures were less severe than expected. These gains also helped take the Shanghai Composite to its first quarterly gain (+10.7%) of 2010.

Further down the pecking order, comes news that three of the four Japanese engineers detained in Hebei have been released; plus rare earths export trade from China to Japan has resumed. Both suggest that diplomatic tensions over the fishing boat are easing.

Finally, congratulations to China’s richest man: Zong Qinghou, Chairman of Hangzhou Wahaha Group, who is 65 and worth an estimated $12 billion. Wahaha in Chinese means ‘laughing child’.

“Serendipity: look for something, find something else and realise that what you’ve found is more suited to your needs than what you thought you were looking for” Lawrence Block

Shanghai Composite:
Today: +1.72% at 2,655.66 at close
This week: +2.6%
September: +0.6%
Q3: +10.7%
YTD: -18.9%

Hang Seng:
Today: -0.09% at 22,358.17 at close
This week: +1.1%
September: +8.8%
Q3: +11.1%
YTD: +2.2%

Oil futures: $77.87
Gold futures: $1314.00
(new ‘immediate delivery’ high of $1,313.45)
Euro/$ spot: 1.3618

Headlines

• China takes further measures to cool real estate boom
• Developers share prices rise
• Stocks show first quarterly gain of 2010
• US House of Representatives votes substantially in favour of pressuring China
• Yuan weakens for first time in 13 days
• China releases three of the four detained Japanese engineers
• Wahaha Chairman is ranked China's richest man, aged 65, with $12 billion
• China welcomes WTO ruling on China poultry imports to the US