HSBC sets aside US$4.3b for bad loans in US

On Monday HSBC Holdings reported that it had set aside US$4.3 billion to cover bad loans in its US consumer finance units for the third quarter. They also reported the company as a whole had made a profit for the quarter as well as the first nine months.

Despite expected slowdown of global economic growth, the bank still expects the mainland to see an economic growth of 8 to 9 per cent given the stimulus package.

Short-lived rally?

The weekend's unveiling of China's economic stimulus plan caused the Shanghai Composite Index to surge 7.27% and the Hong Kong Hang Seng Index up by 3.52% on Monday. However, it seems as if recession worries and caution trumped the announcement with Asian markets dropping yesterday.

600b yuan budgeted for urban railway projects

Beijing announced that it will spend RMB 600 billion (HK$681.12 billion) on urban rail projects in several cities over the next 7 years.

The original budget for 2006 to 2010 was RMB 4.5 trillion, adding in the stimulus package of an additional RMB 4 trillion for 2009 and 2010, would directly translate into more contracts for mainland infrastructure companies in the coming future. On Tuesday, Hong Kong shares of mainland state infrastructure and rail-related firms rose sharply as a result of this news.

Companies to watch for:
China Railway Group (#0390)
Angang Steel (#0347)
Guangshen Rail (#0525)
Maanshan Iron & Steel (#0323)
Jiangsa Express (#0177)
China Railway Construction Group (#1186)
Shenzen Express (#0548)