Kwong added that the credit crunch is being caused by capital inadequacies at financial institutions rather than the pricing of credit.

Bank of China Communications shed 0.45% to HK$8.86, HSBC Holdings declined 0.69% at HK$115.40 and China Life slipped 3.3%.

The Hong Kong Exchanges and Clearing jumped 4.2% on speculation that China will permit mainland investors to invest in Hong Kong stocks in the second quarter.

China Oilfield Services slumped 12% after reporting today that it failed to expand offshore.


Asian Markets Update

In Tokyo Nikkei 225 Index closed higher 263.72 or 2.06% to 13,092.78, in Hong Kong Hang Seng index decreased 550.90 or 2.29% closed to 23,539.27, in Australia ASX 200 index higher 168.10 or 3.11% to close 5,580.40.

In South Korea Kospi Index increased 34.58 or 2.12% to close at 1,663.00, in Thailand SET index closed lower 12.07 or 1.63% to 728.58, and Indonesia JSE Index edged increased 40.42 or 1.63% to 2,516.70. Sensex index in India decreased 372.30 or 2.12% to 17,221.74.


5:00AM New York, 7:00PM Tokyo - Japan’s December trade surplus declined 20.9% from a year ago to 877.8 billion yen in December.

In Tokyo trading Nikkei 225 surged 2.06% or 263.72 to 13,092.78.

In the first section of the Tokyo Stock Exchange 10.8 billion shares worth 1.2 trillion yen were traded and in the second section 305 million shares valued at 4.9 billion yen changed hands.

Of the Nikkei 225 stocks 185 gained, 36 declined, and 3 were unchanged.

Buyers returned to the market and realty, export sensitive, and automobile companies led the gainers. Mitsui Fudosan led gainers with an advance of 10.05%.

Japan’s Ministry of Finance revealed on its website today that exports in Japan rose 6.9% from 6.9 trillion a year earlier to 7.4 trillion yen in December, while imports rose 12.1% year on year from 5.8 trillion yen to 6.5 trillion yen. Trade surplus in December fell 20.9% from 1.1 trillion yen from a year earlier to 877.9 billion yen.

Combined exports to China and Hong Kong in 2007 rose to 17.4 trillion yen, with exports to mainland China rising 19% to 12.8 trillion yen.

However exports to U.S. in 2007 fell for the first time in four years by 0.2% in 2007 to 16.9 trillion yen, ceding its biggest export market status for Japan’s shipments to China.

The finance ministry added that total exports in 2007 rose 11.6%to 83.9 trillion yen leveraged by shipments of cars, steel and telecommunications equipment. Conversely, imports rose by 8.6% to a record 72.12 trillion yen, driven by a 7.4% gain in crude oil imports.

December exports to the U.S. fell for the fourth straight month by 4.5% from a year earlier to 1.42 trillion yen and exports to China grew 8.4% in December to 1.16 trillion yen.

Exports to the European Union also declined to 2.4% rise in December from a year ago from 8.2% rise in November.

The Financial Times reported yesterday that New York Insurance Superintendent Eric Dinallo engaged banking executives yesterday in a bid to pool an initial capital of $5 billion to support specialist insurers known.