Most Chinese Stocks Rise as Developers Gain, Drugmakers Decline
Most Chinese stocks advanced as property companies rose amid growing speculation that the government may relax curbs on the industry as economic growth slows. Health-care companies and utilities retreated.
Xinhu Zhongbao Co. (600208) rallied as shares resumed trading for the first time in a month after the company’s board said it plans to seek regulatory approval for a private share placement. Hualan Biological Engineering Inc. lost 2.2 percent, paring its annual gain to 34 percent. Huaneng Power International Inc. fell 1.3 percent after jumping the most in three weeks yesterday.
Some 454 stocks rose as 424 dropped on the Shanghai Composite Index (SHCOMP), which added less than 0.1 percent to 2,029.42 at the close. The property stock gauge advanced 4.4 percent this week after the Politburo endorsed development of the real estate market as part of efforts to ensure steady economic expansion.
“There are hopes by investors that the government will allow developers to refinance soon to bolster growth,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co., which manages $120 million. “But there’s no suggestion from the securities regulator that it will lift curbs on financing.”
The CSI 300 Index rose 0.1 percent to 2,247.26. The Hang Seng China Enterprises Index (HSCEI) advanced less than 0.1 percent.
The Shanghai Composite gained 0.9 percent this week, paring its annual loss to 11 percent. The measure trades at 8.2 times 12-month projected profit, data compiled by Bloomberg show. Trading volumes in the index today were 2.9 percent lower than the 30-day average, data compiled by Bloomberg show.
Xinhu Zhongbao rose 0.27 yuan to 3.65 yuan. The company’s board approved a plan to raise as much as 5.5 billion yuan ($897 million) in a private placement, according to an exchange statement. Funds would be used for two real-estate projects in Shanghai, it said. The placement still needs to be approved by shareholders and the China Securities Regulatory Commission, according to the statement.
A press official from the CSRC wouldn’t immediately comment on whether it would approve the plan.
China Vanke Co. (000002), the nation’s biggest listed property developer, rose 2.5 percent to 9.98 yuan. Poly Real Estate Group Co., the second largest, added 3.7 percent to 10.93 yuan. China Merchants Property Development Co. gained 3.6 percent to 28.44 yuan.
Money has poured into real estate in the past four years as investors sought better returns than from the stock market and bank deposits, prompting Wang Shi, the chairman of Vanke, to say in June that the housing market faces a bubble that could be “dangerous” if sustained. New home prices in Beijing, Shanghai and the southern city of Guangzhou jumped more than 11 percent in June from a year earlier, the most since at least January 2011, government data show.
Hareon Solar Technology Co. rose 2.3 percent to 6.67 yuan. EGing Photovoltaic Technology Co. (600537) added 2.1 percent to 10.13 yuan. Risen Energy Co. jumped 4.3 percent to 7.07 yuan.
China will offer a 50 percent rebate on value-added taxes for photovoltaic stations projects, the China Securities Journal reported today, citing an unidentified person.
Measures of health-care and utilities stocks in the CSI 300 both slid 0.5 percent.
Hualan Biological lost 2.2 percent to 28.24 yuan. The 14-day relative strength measure for the stock, measuring how rapidly prices have advanced or dropped during a specified time period, was at 69.6 yesterday. Readings above 70 indicate a price may be poised to fall.
Huaneng Power, the listed unit of China’s largest power group, slipped 1.3 percent to 5.50 yuan after jumping 4.1 percent yesterday.
Chinese stocks climbed to a two-month high in New York yesterday as online travel agency Ctrip.com International Ltd. (CTRP) surged after reporting earnings that exceeded estimates.
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