6:00AM New York, 6:00PM Hong Kong – Stocks in Hong Kong and Shanghai fell on the continued worries related to global credit markets. China Coal first half profit jumps but Yunnan Aluminium net income falls.

Market Sentiment

In Hong Kong trading Hang Seng Index fell 1.89% or 429.21 at 22,258.00, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 2.03% or 251.81 at 12,148.04. In Shanghai trading CSI 300 Index plummeted 1.87% or 55.22 at 2,905.63.

Daily turnover on main-board was HK$47.5 billion compared with HK$41.47 billion yesterday.

Finance Ministry Suspends Administrative Fees

Xinhua News Agency reported on its Web site today that the Ministry of Finance announced yesterday in a circular jointly released with the National Development and Reform Committee that Beijing will suspend administrative fees for unemployed people who register their own individually-run businesses for three years.

Some of the charges that will be waived include license registration fees levied by industry and commerce administrations, tax registration fees by tax authorities, health check fees by health administrations and vocational training certificate fees by human resources and social security agencies.

China’s urban registered unemployment rate was 4% in 2007.

Gainers & Losers

Hong Kong stocks dropped further on the worries that credit market losses are yet to hit the bottom after the International Monetary Fund said that there is no end in sight for the U.S. housing market correction.

Financials and banks fell after Merrill Lynch reported to take $5.7 billion write-down related to mortgage assets and raise $8.5 billion in equity offering, diluting current shareholders by 40%. Merrill Lynch has reported loss in four consecutive quarters and taken $41 billion in asset write downs.

HSBC Holdings declined 1.3%, China Construction Bank declined 1.8% and ICBC plunged 1.7%. Insurer China Life slipped 2% and Ping An declined 2.6%. Hong Kong Exchanges & Clearing plunged 4% in tandem with the general bearish market sentiment.

China Mobile plummeted 2.7%. CNOOC rose 0.4% after oil prices remained $125 per barrel.

Retailer Esprit Holdings fell 3.5% after German consumer confidence fell in August on mounting inflationary pressures.

China Communications Services climbed 2.8% after China Telecom unveiled its Rmb 80 billion expansion project. ZTE Corp rose 2.7% and China Wireless Technologies gained 3.2% on expectations that the companies will benefit from the restructure in the telecommunications industry.

China Coal Profit Up 59%

China Coal Energy reported first half profit rise of 59% to 4.22 billion yuan on higher prices of coal and larger volume of sales. Revenue in the first half rose 58% to 26.41 billion yuan and earnings in the period rose 59.3% to 4.219 billion yuan. Earnings per share in the first half rose 39.1% to 0.32 yuan. Raw coal production in the period rose 15.2% to 49.98 million tons. Average coal price in the period rose 33.6% to 455 yuan a ton.

Yunnan Aluminium Company reported first half profit decline of 44% to 147.6 million yuan on rising raw materials costs.

Asian Markets Review