6:00AM New York, 6:00PM Hong Kong – Stocks in China region fell after the worries that the widening U.S. banking crisis may slowdown the exports to the region. China stops iron ore imports from Brazil.

Market Sentiment

In Hong Kong trading Hang Seng Index dropped 4.29% or 801.41 to 17,880.68, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, fell 6.61% or 633.75 to 8,955.26. In Shanghai trading CSI 300 Index rose 0.91% or 20.12 to 2,243.66.

Daily turnover on main-board was HK$55 billion unchanged from Friday last week.

China Suspends Iron Ore Imports from Brazil

The China Iron and Steel Association announced recently that it has urged its members to stop importing iron ore from Brazil and use the domestically produced commodity after Brazil''s mining company Vale do Rio Doce increased its prices for the second time this year.

Vale this month raised prices by 11% for buyers such as Baosteel and Wuhan Iron & Steel, noting that Chinese steel producers paid about 11% less than European buyers.

Prices had been increased by 65% in February.

The steel association has since called an urgent meeting to discuss the recent position by Vale and the country''s major steel makers have signed supply contracts will local mining companies to insulate themselves from the price increases.

CISA vice chairman Luo Binsheng noted: ""Vale should be aware that China doesn''t need that much iron ore now. Demand for import iron ore is becoming weak since domestic output of iron ore has significantly increased.""

U.S. Congress Agrees on Rescue Plan

The U.S. House of Committee on Financial Services reported on its Web site that the U.S. Congress has agreed on a $700 billion package to bailout banks and financial institutions and will remove the illiquid assets from the balance sheet of these companies.

The 106-page bill follows extensive and intense negotiations that limited the authority of the U.S. Treasury Office and put provisions to limit executive pays at institutions that participate in the plan and provide for the government to take a stake in the future gains in the companies that may benefit from the plan.

Initially the U.S. Government will get $250 billion immediately to start buying the distressed assets from troubled financial institutions, while another $100 billion will be used at the discretion of the President.

However the final $300 billion will released only after approval by Congress next year. The bill is expected to be put to a vote in the House of Representatives today, while the Senate is expected to schedule a vote on Wednesday.

Separately the U.K. Treasury reported today that the UK government seized Bradford & Bingley and sold its branch network to Abbey National controlled by Banco Santander for £612 million.

Similarly, the governments of Benelux nations announced that they have agreed that the Belgium will invest 4.7 billion euros in Fortis Bank NV/SA for exchange of 49% equity stake, while the Netherlands will invest 4 billion euros in Fortis Bank Nederland in exchange of 49% stake and Luxembourg will pump 2.5 billion euros in Fortis Banque Luxembourg SA in exchange of 49% equity stake.

As a result of the interventions, Fortis now has core equity of 30 billion euros, which is 9.5 million euros more than the target and Tier 1 ratio above 9% and total capital ratio of 13%.

Maurice Lippens has also decided to step down from the company''s board of directors and a new Chairman will be recruited from outside the company after consultations with the Belgian government.

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