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China’s Stocks Rise, Capping Fourth Weekly Gain; Brokers

China’s stocks rose, capping a fourth week of gains for the benchmark index. Consumer companies jumped, while brokerages led financial companies to the biggest advance among industry groups this week.

Citic Securities Co. (600030) and Haitong Securities Co. surged more than 5 percent after the regulator said it will ease bond financing for securities firms. Kweichow Moutai Co. and SAIC Motor Corp. led gains for consumer staples and discretionary companies after the China Securities Journal reported the government may introduce measures to boost consumption in areas such as autos, household electronics and solar.

“We’ll see more policies aimed at boosting consumption next year and that’ll help China’s economy sustain its growth,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “With the economy stabilizing, the uptrend for stocks is quite firm.”

The Shanghai Composite Index (SHCOMP) rose 1.2 percent to 2,233.25 at the close, capping a 3.7 percent gain this week. The CSI 300 Index (SHSZ300) climbed 1.5 percent to 2,480.05. The Hang Seng China Enterprises Index (HSCEI) advanced less than 0.1 percent. The Bloomberg China-US 55 Index (CH55BN) retreated 0.1 percent yesterday.

The Shanghai measure has risen 14 percent since this year’s closing low on Dec. 3 as the nation’s new leaders said they would promote urban development as part of economic reforms. The index has climbed 1.5 percent in 2012, heading for its first gain in three years. The last trading day of the year will be on Dec. 31. China’s markets are shut Jan. 1-3.

Trading volumes in the Shanghai Composite were 37 percent above the 30-day average today, according to data compiled by Bloomberg. The index trades at 11 times estimated earnings, the highest level in a year. Its 30-day volatility was at 20.2, compared with this year’s average of 17.1.

Brokerages Rally

A measure of financial stocks in the CSI 300 climbed 2.1 percent, adding to a weekly gain of 6 percent for the most among 10 industry groups. Citic Securities, China’s biggest listed brokerage, surged 7.5 percent to 13.12 yuan. Haitong Securities, the second-largest, climbed 5.1 percent to 10.05 yuan. Sinolink Securities Co. jumped 10 percent to 17.24 yuan.

The government will allow brokerages to issue and trade subordinated bonds in approved exchanges, according to a statement posted on the China Securities Regulatory Commission’s website.

“The latest positive for brokerages is that regulators have relaxed rules for subdebt issued by brokerages, such as broadening the range of investors allowed to subscribe to their sub-debt,” He Zongyan, an analyst at Shenyin & Wanguo Securities Co., said by telephone in Shanghai. “This signals that regulators are ready to introduce more measures in the future to enable the transformation of brokerages from traditional stockbroking to capital intermediaries.”

Government Support

The Shanghai Composite this week erased this year’s loss of as much as 11 percent and climbed above the 200-day moving average. Stock gains have been fueled by signs that the nation’s new leaders will provide more industry support and economic growth is stabilizing.

Kweichow Moutai, China’s biggest producer of baijiu liquor by market value, added 2.3 percent to 212.30 yuan. Wuliangye Yibin Co. (000858), the second largest, gained 0.8 percent to 28.23 yuan. SAIC, China’s largest carmaker, advanced 3.6 percent to 17.10 yuan.

China may start measures to boost consumption that may focus on household electronics, vehicles and solar for rural use, the China Securities Journal reported today. The Ministry of Industry and Information Technology will introduce policies next year to boost the information industry, the Shanghai Securities News reported.

Beidou Navigation

China Spacesat Co. surged 5.3 percent to 12.15 yuan. Chengdu GoldTel Electronical Technology Co. rose 4.7 percent to 13.21 yuan. Beijing BDStar Navigation Co. (002151) surged by the 10 percent daily limit to 20.89 yuan.

China will increase its investment in its global Beidou satellite positioning system over the next 10 years, Ran Chengqi, director of the management office of the China Satellite Navigation System, said in a transcript of a press conference posted on the central government’s website.

Shanxi Coal International Energy Group Co. (600546) climbed 3.6 percent to 19.98 yuan, the highest close since Oct. 10. Shenyin & Wanguo Securities raised its recommendation on the stock to buy on a rebound in coal prices and valuations.

The National Bureau of Statistics and China Federation of Logistics and Purchasing are scheduled to release a manufacturing index for this month on Jan. 1. The Purchasing Managers’ Index may climb to 51 from 50.6 a month earlier, according to the median estimate of 24 economists in a Bloomberg News survey. The number of 50 divides expansion and contraction. HSBC Holdings Plc’s PMI index is due Dec. 31.

--Zhang Shidong. With assistance from Ai Peng Soo in Beijing. Editors: Allen Wan, Chan Tien Hin

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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