China’s stocks rose the most in five weeks, led by financial and technology companies, as money-market rates headed for the biggest weekly slump since 2011.
Industrial Bank Co. and Ping An Insurance (Group) Co. climbed at least 2.7 percent as financial companies posted the second-biggest gain among industry groups. China Vanke Co.’s B shares surged 4.9 percent. Sanan Optoelectronics Co. rallied 4.3 percent, pacing gains for technology shares, the best-performing industry group this year. Hareon Solar Technology Co. jumped 7.7 percent on prospects solar demand will increase in 2014.
The Shanghai Composite Index rose 1.4 percent to 2,101.25 at the close, the most since Nov. 18. It tumbled 1.6 percent yesterday. The gauge trades at 8.1 times projected profit for the next 12 months, close to the cheapest since July 31. The seven-day repurchase rate, a gauge of funding availability in the banking system, slid 24 basis points to 5.09 percent and headed for the steepest weekly loss since February 2011.
“Valuations are low and that supports a rebound after a sharp decline,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Given the lackluster economy and the liquidity situation, the rebound is unlikely to last long.”
The CSI 300 Index added 1.7 percent to 2,303.48. The Hang Seng China Enterprises Index was little changed as Hong Kong’s markets reopened after a two-day holiday. The Bloomberg China-US Equity Index fell 0.2 percent in New York yesterday. Trading volumes in the Shanghai Composite were 28 percent below the 30-day average today, according to data compiled by Bloomberg.
A gauge of financial companies in the CSI 300 rose 2 percent. Industrial Bank advanced 2.7 percent to 9.93 yuan. Huaxia Bank Co. surged 3.5 percent to 8.20 yuan. Ping An, the second-biggest insurer, gained 3.2 percent to 40.84 yuan.
Vanke, the largest developer, rose 3 percent to 8.03 yuan in Shenzhen. Its B shares, which are traded in Hong Kong dollars, surged 4.9 percent. Investors may have started to “bottom fish,” Credit Suisse Group AG Hong Kong property analyst Jinsong Du wrote in a response to questions.
A measure of technology companies added 2.3 percent. Sanan Optoelectronics jumped 4.3 percent to 25.49 yuan, adding to this year’s rally of 86 percent. The technology measure has surged 39 percent this year on increased spending from the government, which is seeking new drivers for the economy.
The Shanghai index has fallen 5.4 percent this month, extending this year’s loss to 7.4 percent, amid concern liquidity will tighten before the resumption of new share offerings next month and slowing economic growth will curb corporate profits.
A government report today showed industrial companies’ profits rose 9.7 percent in November from year-ago levels, slowing from a 15.1 percent jump in October.
‘Non-state enterprises out-performed state-owned firms in profit growth,’’ Zhu Haibin, Hong Kong-based economist at JPMorgan Chase & Co., wrote in a note. “The administrative reform that aims to remove access restrictions of private capital investment tends to have a positive effect, while SOE reform and restrictions on government expenditure could have drag on industrial and investment activities.”
About 10 of 78 “competitive” central-government administered state-owned enterprises in the steel, coal, construction, food and auto industries may be consolidated next year, the China Securities Journal reported on its front page.
Hareon Solar surged 7.7 percent to 7.72 yuan. LDK Solar Co., the second-biggest maker of solar wafers, advanced 2.2 percent to in New York yesterday, while Yingli Green Energy Holding Co. rose the most in a week.
Average prices for polysilicon, the key raw material for making solar panels, rose to the highest level in 14 months in the past week, according to data compiled by Bloomberg. China’s government solar energy plans indicate as much as 12 gigawatts of new capacity in 2014, and the Finance Ministry issued in November a policy encouraging solar power distribution.
— With assistance by Shidong Zhang