China’s Stock Index Advances as Trust Investors Bailed Out

Jan. 28 (Bloomberg) -- China’s benchmark stock index rose, led by financial companies, after investors in a troubled high-yield trust were bailed out and New China Life Insurance Co. said profit probably increased last year.

New China Life, the nation’s third-biggest insurer, climbed 1.3 percent after forecasting improved annual profit for 2013. Shaanxi Coal Industry Co., China’s third-largest producer of the fuel, jumped 14 percent on its Shanghai debut after being suspended from trading when it reached a price limit. Apple Inc. supplier Suzhou Anjie Technology Co. fell the most in four months after iPhone sales missed estimates.

The Shanghai Composite Index climbed 0.3 percent 2,038.51 at the close, rebounding from a 1 percent loss yesterday. About 11 stocks fell for every 10 that rose today. Industrial profits rose 6 percent from a year earlier in December, down from 9.7 percent the previous month, the National Bureau of Statistics said today. China’s markets will be shut from Jan. 31 to Feb. 6 for the Chinese New Year holidays.

“The industrial profit report is a bit disappointing and reignites concerns about growth this year,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “Corporate earnings look good so far and investors are gauging how earnings will be this year. There’s not much interest in stock trading as the holidays are coming.”

The CSI 300 Index added 0.2 percent to 2,219.85. The Hang Seng China Enterprises Index fell 0.1 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.- listed Chinese companies, dropped 0.7 percent in New York yesterday.

Trust Accord

Industrial & Commercial Bank of China Ltd. said investors in the 3 billion-yuan ($496 million) product issued by China Credit Trust Co. can recoup their funds, averting the threat of a default that underscored concern over the shadow-banking system and helped spur a selloff in emerging-market currencies and stocks. ICBC added 0.9 percent to 3.39 yuan.

Rights in the trust can be sold to unidentified buyers at a price equal to the value of the principal invested, according to one investor who cited an offer presented by ICBC and asked to be identified only by his surname Chen.

The Shanghai Composite trades at 7.6 times 12-month projected earnings, after reaching the cheapest level on record last week, data compiled by Bloomberg show. Trading volumes in the index were 5.4 percent below the 30-day average.

New China Life climbed to 21.81 yuan after estimating net income rose about 50 percent last year.

Shaanxi Coal

China Life Insurance Co., the nation’s biggest insurer, gained 0.4 percent to 13.82 yuan after saying profit for last year may have jumped by about 120 percent from a low base in 2012, aided by higher investment income. The forecast fell short of the 164 percent gain analysts predicted.

Shaanxi Coal surged 14 percent to 4.55 yuan. The stock was suspended from trading until 2:55 p.m., or five minutes before the close, after rising by the limit of 44 percent from the offer price, the Shanghai Stock Exchange said in a statement posted on its microblog today.

Eight other companies all surged by the 44 percent daily limit on their first-day trading in Shenzhen today. Seven more companies will debut in Shenzhen tomorrow.

Since the China Securities Regulatory Commission ended a more than year-long freeze on initial public offerings, 36 companies have listed shares in the Shanghai and Shenzhen exchanges. So far, the securities regulator has approved 52 companies for IPO sales.

Anjie Tech slid 7.3 percent to 38.36 yuan, the biggest loss since Sept. 11. GoerTek Inc. tumbled 5.1 percent to 29.98 yuan, the lowest close since April 26.

IPhone Sales

Apple sold a record 51 million iPhones in its fiscal first quarter ended Dec. 28, it said in a statement. Analysts had estimated sales of 54.7 million handsets. The company forecast revenue of $42 billion to $44 billion in the current quarter, versus a forecast of $46.1 billion.

Liquor maker Jiuguijiu Co. retreated 4.4 percent to 11.91 yuan, the lowest close since July 2010. The company said savings of 100 million yuan may have been stolen from a bank account in December.

The benchmark MSCI Asia Pacific Index swung between gains and losses before the U.S. Federal Reserve starts a two-day meeting tomorrow to review further cuts to its stimulus program.

The central bank decided at its December gathering to begin cutting its monthly bond purchases by $10 billion to $75 billion. The meeting is the last for Chairman Ben S. Bernanke before Janet Yellen takes over on Feb. 1. Fed stimulus has helped fuel a five-year bull market that has pushed the Standard & Poor’s 500 Index higher by 165 percent.

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