China’s Stock-Index Futures Gain After Biggest Loss in 3 Weeks
China’s stock-index futures rose after the benchmark gauge dropped the most in three weeks yesterday.
Futures on the CSI 300 Index (SHSZ300) expiring in February gained 0.2 percent to 2,232 at 9:17 a.m. local time. Industrial & Commercial Bank of China Ltd. (601398) said investors in a troubled high-yield trust can recoup their funds, according to one investor, staving off a default that threatened to roil China’s markets and stoke concerns of fragility in emerging-market economies.
Shaanxi Coal Industry Co. (601225), China’s third-largest producer of the fuel, and eight other companies will start trading today. China Life Insurance Co. (601628), the nation’s biggest insurer, may be active after saying profit may have more than doubled last year. The statistics bureau is due to release data on industrial companies’ December profit at 9:30 a.m. today.
The Shanghai Composite Index (SHCOMP) dropped 1 percent to 2,033.30 yesterday. China’s markets will be shut from Jan. 31 to Feb. 6 for the Chinese New Year holidays. The CSI 300 Index declined 1.3 percent to 2,215.92. The Hang Seng China Enterprises Index (HSCEI) retreated 2.2 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, fell 0.7 percent in New York.
The agreement over the 3 billion-yuan ($496 million) product issued by China Credit Trust Co. averts a threatened default that underscored concern over the nation’s shadow-banking system and helped spur a selloff in emerging-market currencies and stocks.
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. China Credit Trust earlier said it reached an agreement for a potential investment and asked clients of ICBC, China’s biggest bank, to contact their financial advisers.
Shaanxi Coal raised 4 billion yuan ($661 million) from an initial public offering after cutting its sales size by 59 percent. The other eight companies will debut in the Shenzhen Stock Exchange.
Since the China Securities Regulatory Commission ended a more than one-year-long freeze on IPOs, 27 companies have listed shares in the Shanghai and Shenzhen exchanges, and nine will start trading today. So far, the securities regulator has approved 52 companies for IPO sales.
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 17 percent higher than the 30-day average yesterday, according to data compiled by Bloomberg.
China Life may be active. The insurer said estimated profit for last year may jump 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.
Zijin Mining Group Co. (601899), China’s largest gold producer, may decline after saying net income dropped 58 percent last year.
Liquor maker Jiuguijiu Co. may be active. The company said savings of 100 million yuan may have been stolen from a bank account in December.
In the U.S., the Federal Reserve will start 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.
Shanda Games Ltd. (GAME) rallied to a two-year high yesterday, after the operator of online games received a $1.9 billion offer to be taken private. American depositary receipts of Shanda surged 15 percent to $6.50, as Shanda Interactive Entertainment Ltd. and an affiliate of Primavera Capital Ltd. proposed to buy the company for $6.90 per ADR.
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