Increase in Lunar New Year tourism, revenue fails to boost stocks on first trading day in mainland China

12-Feb-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

A 7.6 per cent year-on-year increase in domestic tourism during the Lunar New Year holiday failed to boost stocks on the first day of trading in the Year of the Pig in mainland China. The benchmark Shanghai Composite Index opened flat on Monday, while the Shenzhen Component Index opened higher, as the US-China trade talks continued to weigh on the market.

On Sunday, the official Xinhua news agency reported strong growth in domestic and international travel and spending over the week-long holiday, with border crossings in and out of China rising by 11 per cent from a year ago to 12.53 million. Domestic tourism generated 513.9 million yuan (US$76 million) in revenue, an increase of 8.2 per cent.

But this was outweighed by concerns about the trade talks and a slowing economy, according to traders. Castor Pang Wai-sun, head of research at Core Pacific-Yamaichi, said: “For the short term, I don’t think growth figures reported on domestic trips and spending is supportive of Chinese equity benchmark indexes. Such short-term spending decisions were probably made during last year and these figures would unlikely overturn investors’ concerns over the slowing down of the overall Chinese economy.”

The Shanghai Composite Index opened flat, down 0.042 per cent, or 1 point, at 2617.12, while the Shenzhen Component Index was trading higher by 0.95 per cent, or 72.93 points, at 7,756.93. The CSI 300 index was up 0.082 per cent, or 2.65 points, at 3,250. In Hong Kong, the Hang Seng Index was almost flat, opening down by 0.18 per cent, or 49 points, at 27,897.09. Utility stocks bucked the trend, as CLP Holdings was up 0.3 per cent at HK$92.2, while HK & China Gas was up 0.57 per cent at HK$17.44.

This week, officials from China and the United States are expected to meet in Beijing, starting with the arrival of deputy US Trade Representative Jeffrey Gerrish on Monday. Later, on Thursday and Friday, more meetings are scheduled between Chinese vice-Premier Liu He and US Trade Representative Robert Lighthiser and US Treasury Secretary Steven Mnuchin.

The market is hoping these meetings will at least yield progress in the form of an extension of the March 1 deadline, when US tariffs on Chinese imports will rise from 10 per cent to 25 per cent on goods worth $200 billion.

“At the current level, the Hang Seng Index has risen by 3,500 points from the low level seen in October 2018. Going forward, any further upside of the index this week is dependent on whether there will be more progress from Beijing’s trade negotiations, which are taking place this week,” said Pang.

https://sg.news.yahoo.com/increase-lunar-tourism-revenue-fails-034127306.html

 


Category: China

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