6:00AM New York, 6:00PM Hong Kong – Credit markets were calmer after the rating affirmation from S&P on two U.S. bond insurance companies.

Hong Kong stocks overcome morning session losses on the fears that large new issues offering will sap liquidity from the market. Market averages reversed their declines after the U.S. bond insurers Ambac Financial Group and MBIA were reaffirmed their highest rating.

Market Sentiment

In Hong Kong trading The benchmark Hang Seng Index gained 1.9%, or 445.61 at 23,714.75, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, advanced 1% or 123.86 at 13,326.84.

Daily turnover on main-board was HK$68.7 billion from HK$63.7 billion yesterday.

Bond Insurers keep ratings

U.S. bond insurers MBIA and Ambac Financial Group kept their rating as S&P yesterday affirmed its financial strength ratings on the troubled bond insurers, helping calm the financial markets on potential credit market losses.

S&P affirmed the ""AAA"" rating on MBIA Inc and removed it from its CreditWatch list, which is a step further from a downgrade. MBIA currently insures $670 billion in bonds.

Although Ambac Financial Group Inc., which insurers $555 billion in debt, was affirmed at ""AAA,"" the bond insurer was kept on S&P’s CreditWatch list.

Steel prices rise

Xinhua News Agency reported today that China’s largest steelmaker Baoshan Iron & Steel Co yesterday raised product prices by 20% percent for the second straight quarter on higher raw material costs and a projected increase in domestic demand.

According to the report, Baoshan said in a statement on its website it will raise the price of hot-rolled steel coils by Rmb800 per ton, or 20%, and cold-rolled steel by 16.7%, or Rmb800 per ton. Analysts had earlier projected prices will increase be between 12% and 15%

Marine business rakes in Rmb 341.4 billion

The People’s Daily Online reported today in a statistical bulletin released at an ongoing annual conference of the State Oceanic administration (SOA) held in Changsha China''s marine noted that the shipping business advanced 21.1% from a year ago by Rmb 341.4 billion in value added in 2007.

The bulletin observed that the number of coastal ports in China with handling capacity exceeding 100 million dead weight tons (DWT) has increased to 14.

Shanghai Port handled 26.15 million in 20-foot container equivalent units (TEU) in 2007, surpassing Hong Kong to rank second globally.

Gainers & Losers

Financial stocks advanced on after worries of potential subprime related losses that might be triggered by the downgrade of MBIA and Ambac Financial Group subsided. HSBC extended its gains for the fourth straight trading session and added 2.8% to HK$119.70.

Property companies rallied on the back of the news. Sun Hung Kai Properties rose 4.1% to HK$135.70.

Steel companies rallied after the country’s largest steel maker Baoshan Iron & Steel announced yesterday that it will raise the price of steel by 20%. Angang Steel surged 5% to HK$20.95 and Maanshan Iron & Steel gained 2.5%t to HK$5.

Hong Kong Exchanges and Clearing Ltd stabilized from recent declines to rise 1.3% at HK$142.70.