Chinese Stock Indexes Rise; Vaccine Producers Pace Advance
Chinese stock indexes advanced for a second day. Vaccine producers, such as China Animal Husbandry Industry Co. (600195), gained after a state media report the nation reported three suspected human cases of avian influenza.
Textile companies including Youngor Group Co. rose on reports that China and the U.S. have reached an agreement over a textile trade dispute.
If a bird-flu pandemic breaks out ``people's spending on drugs will increase,'' said Zhang Ling, who manages the equivalent of $720 million at First Trust Management Co. in Shanghai. The trade agreement for textile stocks is ``quite positive because it will at least guarantee contributions from exports'' for a couple of years.
The Shanghai Composite Index, which covers yuan-denominated A shares and foreign-currency B shares, rose 0.60, or 0.1 percent, to 1100.65 at the 3 p.m. local time close after earlier falling as much as 0.9 percent. The Shenzhen Composite Index, which tracks the smaller market, added 0.97, or 0.4 percent, to 269.98.
China Animal Husbandry Industry, a Beijing-based manufacturer of animal medicines, jumped 0.42 yuan, or 8.1 percent, to 5.61, its biggest gained since Jan. 30 last year.
The mainland had three suspected human cases of bird flu in Xiangtan county, in the southern province of Hunan, the official Xinhua news agency reported, citing an unidentified spokesman from the Ministry of Health.
`Can't Rule Out'
The government said it can't rule out the possibility of human infection of the H5N1 avian flu virus in the three cases previously diagnosed as pneumonia, the report said, as the village had recently experienced an outbreak of bird flu.
Beijing Tiantan Biological Products Corp., a manufacturer of vaccine products, advanced 0.33 yuan, or 5.5 percent, to 6.34. Inner Mongolia Jinyu Group Co., a producer of biopharmaceuticals for animals, surged 0.40 yuan, or 8.3 percent, to 5.20 for the biggest gain since June 8.
Youngor Group, China's No. 1 maker of men's clothing by sales, rose 0.05 yuan, or 1.5 percent, to 3.38. Chinese and U.S. negotiators have agreed to raise the allowable U.S. import growth rate for Chinese pants, knit shirts, bras and other items to 10 percent in 2006 and to about 16 percent by 2008, representatives for both textile importers and producers said on condition of anonymity on Nov. 5 in Washington.
U.S. Trade Representative Bob Portman and Chinese Commerce Minister Bo Xilai will likely sign an accord next week, the Washington Post said, citing unidentified industry sources who learned the details from Bush administration officials at a confidential meeting.
Black Peony (Group) Co., China's largest denim fabric maker, advanced 0.21 yuan, or 5.8 percent, to 3.86. Luthai Textile Co., a textile maker in the eastern province of Shandong, gained 0.10 yuan, or 3 percent, to 6.90. Shanghai Worldbest Industry Development Co., a manufacturer of apparel and textile products, added 0.03 yuan, or 1.4 percent, to 2.23.
Losses by petrochemical stocks weighed on the market after Sinopec Shanghai Petrochemical Co. said its parent had no plans to take the company private, dashing investors' expectations of an offer to buy the listed unit's shares.
Sinopec Shanghai Petrochemical, China's largest maker of ethylene, slid 0.05 yuan, or 1.5 percent, to 3.35. Shanghai Petrochemical said it received oral confirmation from its Beijing-based parent, China Petroleum & Chemical Corp. (600028), or Sinopec, that it hasn't any intention to privatize the company.
``The market had expected the acquisition of Shanghai Petrochemical and now the speculative sentiment has been abating,'' said Zhang Lan, who oversees the equivalent of $120 million as head of research with Guolian Fund Management Co. in Shanghai. ``Taking the company private would have been good for both the parent and subsidiary because it would have reduced intra-company competition.''
Sinopec, Asia's biggest oil refiner, dropped 0.01 yuan, or 0.3 percent, to 4.03. The company has said it plans to eventually take all of its four Hong Kong-listed units private, without giving a specific timetable.
Sinopec's other publicly traded units also dropped. Sinopec Qilu Co., 82 percent owned by Sinopec, declined 0.06 yuan, or 0.8 percent, to 7.19. Sinopec Yangzi Petrochemical Co. lost 0.14 yuan, or 1.5 percent, to 9.25.
To contact the editor responsible for this story: Ben Richardson in Hong Kong at firstname.lastname@example.org