Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

China’s Stocks Fall From 2-Week High, Led by PetroChina, Kangmei

Aug. 28 (Bloomberg) -- China’s stocks fell from a two-week high as PetroChina Co. dropped after four senior managers were removed amid a government anti-corruption campaign and drugmakers slid on concern earnings are trailing estimates.

PetroChina, the nation’s biggest oil producer and most heavily weighted stock, was the biggest drag on the benchmark index with a 0.5 percent loss. Kangmei Pharmaceutical Co. tumbled 10 percent, sending health-care stocks to the biggest decline among industry groups. Shandong Gold Mining Co. led a rally for bullion producers as speculation the U.S. will take military action against Syria spurred investors’ demand for a haven. Shanghai International Port (Group) Co. rose 10 percent.

The Shanghai Composite Index fell for the first time in three days, losing 0.1 percent to 2,101.30 at the close. The CSI 300 Index dropped 0.6 percent to 2,328.06.

“Earnings are the focus of the market and if companies miss estimates, investors simply sell the stock,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “Military tensions will also curb global demand for risk assets like stocks.”

The Hang Seng China Enterprises Index retreated 2.2 percent. The Bloomberg China-US Equity Index slid 1.6 percent in New York yesterday. The Shanghai Composite is valued at 8.4 times its projected 12-month earnings, compared with the five-year average of 12.7 times, according to data compiled by Bloomberg. Trading volumes were 60 percent higher than the 30-day average today, according to data compiled by Bloomberg.

Weak Sentiment

PetroChina lost 0.5 percent to 7.95 yuan in Shanghai and 4.4 percent in Hong Kong trading. Three PetroChina executives to resign are Li Hualin, chairman of unit Kunlun Energy Co., an oil and gas producer and distributor; PetroChina vice president and general manager of its biggest oilfield, Ran Xinquan; and Wang Daofu, chief geologist for PetroChina.

All are “currently under investigation by relevant PRC authorities,” the Beijing-based company said yesterday in a statement. The fourth -- Wang Yongchun, head of the company’s second biggest oilfield -- was replaced, spokesman Mao Zefeng said. The official Xinhua News Agency reported the government probe into Wang on Aug. 26.

“It is unclear whether the issues under investigation are of a purely personal nature or related to the managers’ respective duties at PetroChina,” Citigroup Inc. analysts wrote in a report. “We expect sentiment on the stock to be weak as long as there is uncertainty over this issue.”

Drugmakers Fall

A measure of drugmakers in the CSI 300 sank 2.8 percent, the most among the 10 industry groups. The decline pared the index’s gain to 24 percent this year.

Kangmei Pharmaceutical slumped 10 percent to 19.33 yuan after posting a 33 percent increase in first-half profit.

“The company’s first-half earnings were slightly lower than expectations,” Li Ying, an analyst at Capital Securities Corp. in Shanghai, said in a phone interview today. No health-care companies have reported first-half earnings that exceeded forecasts so far, Li said.

CSR Corp. and China CNR Corp., the largest train makers, declined after posting lower profits. CSR sank 1.7 percent to 4.02 yuan and CNR slid 0.9 percent to 4.24 yuan. CSR said first-half net income dropped 24 percent from a year earlier while CNR said profit fell 5.4 percent.

Of the 178 Shanghai-listed companies that reported first-half earnings that Bloomberg tracks, 83 beat analyst estimates, 84 trailed and the rest were in line. Chinese publicly traded companies are required to release first-half reports by the end of August.

Gold Stocks

Shandong Gold, China’s second-largest bullion producer by market value, jumped 10 percent to 25.28 yuan. Zijin Mining Group Co., the largest, gained 9.8 percent to 2.78 yuan.

Gold traded near the highest level since May after a four-day rally as the U.S., France and Britain stepped closer to a strike against Syria. Syria is suspected of launching an Aug. 21 chemical-weapons attack outside Damascus.

Any follow-up acts on Syria should be backed by factual, reliable investigative results, according to a commentary published by the People’s Daily today. Some “foreign forces” try to make accusations on Syria’s chemical weapons use, aiming to stir up public opinion for intervention, the commentary said.

Shanghai Port, the operator of the world’s second-busiest harbor, surged 10 percent to 3.74 yuan, the highest close since August 2011. China Shipping Container Lines Co., which is based in Shanghai, jumped 10 percent to 2.31 yuan.

The Shanghai free-trade zone may start at the end of September, the Shanghai Securities News reported today, citing an unidentified person.

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

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.