Most Chinese Stocks Fall as Liquor Makers Drop; Ping An Rebounds

Most Chinese stocks fell, as declines by consumer-staple producers overshadowed gains among financial and energy companies.

Wuliangye Yibin Co. sank 2.7 percent, pacing declines among liquor makers. Ping An Insurance (Group) Co., the nation’s second-biggest insurer, gained 1.2 percent, snapping four days of losses,amid speculation HSBC Holdings Plc will sell its stake in the company.

Three stocks dropped for every one that advanced in the Shanghai Composite Index, which slid 0.3 percent to 2,003.30 as of 11:07 a.m. local time. It climbed 0.7 percent earlier. The CSI 300 Index fell 0.2 percent to 2,161.28. The Shanghai gauge closed at its lowest level since Sept. 26 yesterday after data showed foreign direct investment in China dropped last month. Conference Board reported today that its Chinese leading economic index gained 1.5 percent in October.

“The market rose a bit at the start before paring gains again, showing the lack of confidence,” Zhou Lin, an analyst at Huatai Securities Co., said by phone from Nanjing. “There isn’t enough volume to push stocks any higher and investors are unsure the economy has reached a bottom. For the rest of the year, I don’t see any impetus for shares to climb substantially.”

The last time the Shanghai Composite closed below 2,000 was in January 2009. The gauge’s trading volumes were 38 percent below the 30-day average for this time of day, according to data compiled by Bloomberg. Volumes on the city’s bourse slumped yesterday to the lowest level since Dec. 12, 2011, the data show.

The Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong climbed 0.7 percent. The Bloomberg China-US 55 Index, the measure of the most-traded U.S.-listed Chinese companies, dropped 1.1 percent in New York.

Share Sales

A gauge of consumer staples in the CSI 300 fell 0.9 percent, the biggest drop among 10 industry groups. The measure is down 21 percent from its July 13 peak.

Sichuan Swellfun Co. slumped 4.4 percent while Wuliangye Yibin dropped 2.7 percent. Jiuguijiu Co. shares remained halted trading after the company said it would check an unidentified media report that its liquor contains excessive amounts of plasticizer, a chemical.

“Reports about plasticizer in Jiuguijiu are very negative to liquor makers,” said Wang Ping, analyst at Great Wall Securities Co. The Securities Times reported an unidentified company official denying the possibility of plasticizer in liquor products. Three calls to the company’s board office by Bloomberg before business hours were not answered.

IPO Concerns

The Shanghai Composite had lost 2.3 percent since Nov. 14 through yesterday amid concern a new generation of leaders named by China’s ruling party will fail to accelerate economic reforms. The gauge has fallen 8.4 percent this year.

China’s securities regulator will conduct its first review of a share-sale application in more than a month today.

The China Securities Regulatory Commission will today decide on Zhuhai Port Co.’s plan to place shares, the regulator said in a statement dated Nov. 16. Zhuhai Port said in December 2011 that it planned to raise 561 million yuan ($90 million) to finance an acquisition. Zhuzhou Times New Material Technology Co.’s share placement plan was the last to be reviewed and approved on Oct. 12, according to the CSRC’s website.

More than 800 companies have applied and are awaiting approval to sell shares in China, the 21st Century Business Herald reported on Nov. 14. Of these, more than 700 are initial public offerings, according to the newspaper.

Two phone calls today to the press office of the CSRC seeking comment went unanswered.

Policy Direction

The Shanghai Composite trades at 9.6 times estimated profit for 2012, compared with the 17.8 average multiple since Bloomberg began compiling the weekly data in 2006. Thirty-day volatility on the index was at 12.5, compared with this year’s average of 17.1.

Ping An rose 1.2 percent to 35.74 yuan. HSBC is in talks to sell shares of Ping An to Thailand’s Charoen Pokphand Group for about HK$74 billion ($9.6 billion), the Shanghai Securities News reported. HSBC contacted China Investment Corp. about the sale of its stake in Ping An,the Wall Street Journal reported, citing people familiar.

The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., slid 1 percent, the biggest drop in a week, to $36.19.

-- Editors: Darren Boey, Richard Frost

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