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Chinese shares close up 1.61%

Chinese equities rose Friday with the benchmark Shanghai Composite Index up 1.61 percent, or 52.42 points, to close at 3,317.04, led by heavyweights.
The Shenzhen Component Index increased 0.91 percent, or 125.09 points, to close at 13,884.93.
Combined turnover rose to 406.55 billion yuan ($59.52 billion) from 314.94 billion yuan on the previous trading day.
Losers outnumbered gainers by 686 to 185 in Shanghai and 697 to117 in Shenzhen.
Most heavyweights gained. Industrial and Commercial Bank of China Ltd, the nation\’s biggest listed lender, gained 2.85 percent to 5.41 yuan. China Vanke Co, the country\’s biggest listed property developer, rose 3.37 percent to 11.97 yuan. PetroChina Co, the country\’s largest oil producer, was up 3.33 percent to 13.97 yuan.

\”Signals from the government reassured investors on the continuity of the positive macro-economic policies and boosted the heavyweights in the banking, chemical and coal sectors,\” said Zhang Xiang, an analyst with Guodu Securities.
A meeting of the Political Bureau of the Communist Party of China Central Committee agreed last Friday that the country would continue the proactive fiscal policy and moderately easy monetary policy next year.

Chinese shares close up 0.45%

Chinese equities rose with the benchmark Shanghai Composite Index up 0.45 percent, or 14.86 points, to close at 3,331.90 Monday, led by heavyweights.
The Shenzhen Component Index increased 1.2 percent, or 166.59 points, to close at 14,051.52.
Combined turnover was 277.3 billion yuan (40.60 billion U.S. dollars).
Losers outnumbered gainers by 693 to 125 in Shanghai and 656 to96 in Shenzhen.

Chinese shares open higher over extended consumption stimulus

Chinese shares opened higher on Thursday as the Chinese government announced to further boost domestic consumption next year.
The benchmark Shanghai Composite Index rose 0.58 percent to open at 3,258.35 points. The Shenzhen Component Index edged up 0.66 percent to 13,862.76 points at the opening.
China\’s State Council said Wednesday that policies to boost consumption will be further strengthened and most of the current policies will be continued, in an effort to maintain a stable and relatively rapid economic growth next year.

Hong Kong stocks close 1.18% lower

Hong Kong stocks fell for three consecutive trading days on Tuesday, ending down 1.18 percent, or 264.44 points, at 22,060.52.
The benchmark Hang Seng index opened lower 18.79 points, or 0. 08 percent, at 22,306.17, which was also the day\’s low. It once reached as high as 22,055.02 during the session. Turnover rose to 68.46 billion HK dollars (about 8.84 billion U. S. dollars) from Monday\’s 60.94 billion HK dollars (about 7.87 billion U.S. dollars) .
The Hang Seng China Enterprises Index gave up 206.20 points, or1.54 percent to close at 13,152.10.
All of the four major stock categories lost ground. The finance sub-index dipped 1.62 percent, the utilities lost 0.21 percent, the properties went down 0.70 percent, and the commerce and industry, 0.79 percent.
Bank stocks were weak. Banking giant and market heavyweight HSBC tumbled 1.95 percent to close at 90.55 HK dollars, and its local unit Hang Seng Bank shed 0.17 percent.
As for Chinese mainland commercial lenders, Bank of China fell 1.58 percent to 4.35 HK dollars. Industrial and Commercial Bank of China decreased 1.81 to 6.52 HK dollars. China Construction Bank slid 2.11 to 6.97 HK dollars.
China Mobile, the leading mobile carrier on the Chinese mainland, closed down 0.96 percent at 72.35 HK dollars.
The oil shares were also losers. PetroChina lost 1.42 percent, offshore oil producer CNOOC fell 1.17 percent and Sinopec dropped 0.77 percent.
Cheung Kong, the flagship of Hong Kong\’s richest man Li Ka- shing, dipped 0.10 percent to 100.70 HK dollars. Sun Hung Kai Properties, the largest residential housing developer in Hong Kong, fell 0.68 percent to close at 117.30 HK dollars. Henderson Land finished 2.21 percent lower at 57.55 HK dollars. (7.7425 HK dollars = 1 U.S. dollar)

ChiNext stocks up 0.45% Monday

The ChiNext rose 0.45 percent on Monday, with 12 out of the 28 shares at China\’s start-up board for small and medium-sized enterprises slumped.
The board, which is based in Shenzhen and started trading on Oct 30, 2009, is tailored to the needs of enterprises engaged in independent innovation and other enterprises with great growth potential.

Chinese shares up 3.20% Monday

Chinese equities rose 3.20 percent Monday, led by robust securities and agricultural shares.
The benchmark Shanghai Composite Index was up 3.20 percent, or 99.04 points, to close at 3,195.30 points.
The Shenzhen Component Index gained 4.74 percent, or 610.63 points, to close at 13,486.77 points.
Combined turnover shrank to 270.83 billion yuan ($41 billion) from 288.04 billion yuan on the previous trading day.

Emerging market IPOs turn hot investor picks

Initial public offerings (IPOs) in emerging nations are returning about 15 times more than IPOs in developed countries even as companies from China to Brazil flood the market with more shares than ever.
Listings by Longfor Properties Co, Banco Santander (Brasil) SA and Kuala Lumpur-based Maxis Bhd helped raise $39 billion in emerging markets during the three months ending on Monday, data compiled by Bloomberg show. That outstrips the amount sold in IPOs from 23 industrialized nations by $21.3 billion, the biggest gap since at least 2000, the data show.
While IPOs in developing markets rose 21 percent and offerings in the Chinese mainland rallied 88 percent in the past three months, the \”avalanche\” of sales may help spur a 20 percent drop in share prices, according to Mark Mobius.
\”Investors are a lot more confident about emerging markets than they are in developed markets,\” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors. \”Investors realize that the growth potential is in the emerging world.\”
Thirty-seven companies from the nations in the MSCI Emerging Markets Index have sold shares in public offerings this month, bringing the numbers of IPOs since September to 149, according to data compiled by Bloomberg. The sales have been propelled by a 98 percent rally in MSCI\’s gauge of developing countries since March 2.
The surge in offerings will put \”downward pressure\” on prices, according to Mobius, who oversees about $25 billion of developing-nation assets at Templeton Asset Management Ltd. The MSCI Emerging Markets Index slid 2.5 percent last week, the first decline in a month, as Dubai\’s attempt to delay debt repayment unnerved investors.
\”I\’ve been cautious because I\’ve felt that there would be a significant correction,\” Mobius said from Hanoi in a Bloomberg Television interview on Nov 27. \”With these IPOs in the pipeline, that will tend to suppress the emerging markets.\”
No US IPOs are scheduled until Dec 9, as the pace of offerings slows after the Thanksgiving holiday, according to Bloomberg data.
Companies in developing nations have grown more successful in attracting money since March, when equity markets bottomed after the worst financial crisis since the Great Depression.
IPOs in emerging markets raised $677 million more than those from industrialized countries in the three months ended in April, data compiled by Bloomberg show. That advantage has now widened to $21.3 billion in the September-to-November period.
High growth
Companies in emerging nations are offering more shares as economists project that growth will outpace the US by as much as three times. China\’s gross domestic product will expand 9.5 percent next year and Brazil\’s will rise 3.8 percent, estimates compiled by Bloomberg show. That compares with 2.6 percent in America and 1.2 percent for the euro zone and Japan.
\”Emerging markets are where everyone wants to have their money,\” said John Ditierri, who helps oversee $11 billion in equities at Emerging Markets Management. \”If you go through the list of investment options, you want to have a higher allocation than you did before.\”
Buyers of IPOs from emerging markets have also been rewarded with bigger gains. Since September, companies with initial offerings have climbed a median 21 percent in the first month of trading, data compiled by Bloomberg show. That compares with a 1.4 percent advance by IPOs in developed nations.

Mainland share rally seen going on to 2010


Investors monitor stock price movement at a brokerage in Haikou, Hainan province. The Shanghai Composite Index has rallied 75 percent so far this year.[China Daily]
Chinese stocks will rebound from their worst week in three months and keep rising next year as the strengthening economy lures more funds from overseas, Citigroup Inc and Mirae Asset Global Investments Co said.
China is on course for a \”long-term, multi-year bubble that\’s not going to burst in 2010\”, Citigroup Inc\’s head of China research Lan Xue told reporters in Hong Kong on Monday.
The Shanghai Composite Index fell 6.4 percent last week, the most since the five days ended Aug 14, on concern banks will sell shares after unprecedented lending eroded their capital.
\”It\’s a short-term correction, on the news of the China banks\’ capital raising,\” Koo Jae-sang, the Seoul-based chief executive officer of Mirae Asset Global, said. \”Long-term, the China growth story is still intact and there\’s still upside.\”
The Shanghai Composite has advanced 15 percent this quarter, the third-best performer among 90 indexes tracked by Bloomberg worldwide. Stocks climbed on optimism a 4 trillion yuan ($586 billion) government spending package and an unprecedented 8.9 trillion yuan of new loans will aid the nation\’s recovery.
China\’s gross domestic product may expand 8.5 percent this year and 9.3 percent in 2010, based on the median forecasts of 38 economists surveyed by Bloomberg.
Koo, 45, whose company manages the equivalent of $48 billion in assets, said corporate earnings may rise more than 20 percent in 2010, citing analyst estimates. An expected appreciation in the yuan may also draw investors, he said.
The credit expansion helped the Shanghai Composite rally 75 percent this year and home prices in 70 major cities climb at the fastest pace in 14 months in October.
\”It\’s an ongoing domestic demand growth story,\” said Koo, declining to give his projection for the gain in equities next year, or to name his stock selections. \”The rise in corporate earnings convinced me that global investors will once again focus on China.\”
The Shanghai Composite remains the second-most expensive benchmark index in Asia excluding Japan after the decline last week. The measure is trading at 23 times estimated earnings for 2009, twice the level a year earlier, data compiled by Bloomberg showed.
\”If you think about the earnings forecasts, the price-earnings ratio may not be expensive,\” Koo said.
Risks faced by China\’s market next year include a slower-than-expected recovery in the US economy and unwinding of so-called dollar carry trades, when investors borrow dollars and purchase higher-yielding assets in other currencies to take advantage of record-low rates in the US, he said.
Mirae Asset Global has teamed up with Huachen Trust Co and Tiantu Capital Co in a venture in China, and may invest further in that market after raising funds locally, he said. He likes banks, insurers, Internet and consumer-related stocks, and tends to pick \”sector leaders\”, the largest in the respective industries or those that his managers view are the most competitive.
Growing demand from global pension funds may also benefit China and other emerging markets such as Brazil, he said. Emerging markets account for 30 percent of the global economy, and only make up less than 5 percent of portfolios of global pension funds, he said.
The Chinese mainland accounted for the biggest weighting among Mirae\’s overseas investments, followed by India, China\’s Hong Kong SAR, Brazil and Russia as of October, the company said.

Hong Kong stocks close up 0.80%

Hong Kong stocks extended gains from Tuesday tracking gains on Wall Street and moved up 0.80 percent, or 176.42 points, to close at 22,289.57.
The benchmark Hang Seng index opened 289.36 points higher, or 1.31 percent, at 22,402.51 on Wednesday. It moved between 22,439.36 and 22,266.69 during the day\’s trading, with turnover going up to 77.90 billion HK dollars (about 10.06 billion U.S. dollars) from Tuesday\’s 74.90 billion HK dollars (about 9.67 billion U. S. dollars).
Analysts said they expected the benchmark index to be volatile in coming sessions, consolidating between 21,000 and 22,500 points. Last week, the index suffered heavy losses due to Dubai\’s debt crisis, losing over 1,000 points.
The Hang Seng China Enterprises Index swelled 111.81 points, or0.85 percent to close at 13,341.81.
Three of the four major stock categories gained ground. The finance sub-index rose 0.59 percent, the properties up 1.27 percent, the commerce and industry advanced 1.20 percent, while the utilities lost 0.78 percent.
Banking giant and market heavyweight HSBC gained 0.98 percent to close at 92.55 HK dollars. China Mobile climbed 1.10 percent at73.85 HK dollars.
The mainland-based commercial lenders ended mixed. ICBC and CCB ended higher by 0.60 percent and 1.42 percent respectively, while Bank of Communications fell 0.75 percent and Bank of China stayed unchanged.
Oil shares closed higher, boosted by an overnight rise in oil prices. PetroChina gained 1.43 percent, Sinopec edged up 1.39 percent and offshore oil producer CNOOC gained 1.16 percent.
As for local properties, Cheung Kong, the flagship of Hong Kong\’s richest man Li Ka-shing, rose 0.81 percent to 99.40 HK dollars. Sun Hung Kai Properties up 1.30 percent to 117.10 HK dollars. Henderson Land went up 0.71 percent to 57.10 HK dollars.
China Resources Power continued to lose, falling 0.63 percent to 15.70 HK dollars. (7.742 HK dollars = 1 U.S. dollar).

Agri machinery maker is ChiNext darling

No investor would have expected a retailer of agricultural machinery to be the dark horse on ChiNext, China\’s NASDAQ-style trading board that has remained subdued after a roller-coaster ride post-debut.
The share price of Sichuan Jifeng Agricultural Machinery Chain Co Ltd yesterday jumped by the 10-percent daily trading limit to 88.11 yuan ($12.91) after rising consecutively over the past 13 trading days.
The Chengdu-based agricultural machinery firm has exceeded investor expectation since its debut on Oct 30, running ahead of hi-tech enterprises and the star-studded film producer Huayi Brothers, as the best-performing stock on ChiNext.
Its share price has so far experienced a nearly four-fold jump from its initial public offer price of 17.75 yuan. Even though it made a net profit of just 27.62 million yuan in 2008, the company\’s market value is now more than 5.5 billion yuan with a price/earnings ratio of 200.
Meanwhile, the wild ride in its share prices has made Chairman Wang Xinming and his wife Wang Hongyan the two largest shareholders in the company, among the richest people to own companies trading on ChiNext.
In just a month, the total market value of the stock they held advanced from 730 million yuan to 1.82 billion yuan.
\”We didn\’t even expect such a strong market force. It\’s becoming hard for us to remain low-profile,\” a senior executive of Jifeng Agricultural Machinery was quoted by the 21st Century Business Herald as saying.
The executive said there was not much change in the company\’s fundamentals and it is facing huge pressure because of the skyrocketing price of its shares.
Jifeng\’s stock price rose by just 99 percent on its first trading day, compared with a 209 percent rise of that day\’s biggest gainer, Chengdu Geeya Technology.
The surprise came the next day when its shares touched the 10-percent trading limit even as all other stocks nosedived. The steep climb even forced the company to suspend share trading twice since the listing.
Analysts said the lower market valuation of the company initially and its promising business model, were the twin factors that market speculators exploited to beef up the share price.
The country\’s largest farm machinery firm now has 70 directly operated chain stores and a sales network of 550 agents, mainly in Southwest China. Its business grew rapidly in the past three years with its net profit touching 25.08 million yuan in the first half of this year.
Some analysts, however, warned that a sharp fall in its share prices was likely in the future as the high valuation of the stock was beyond the normal range and that the market was overestimating the company\’s future performance.
\”The price has clearly run wild and the market value has risen beyond the normal range,\” said Qian Weihai, an analyst at Shanghai Securities. \”It is facing the risk of a sharp fall at any time in the future.\”