China’s Stocks Fall, Paring Weekly Gain, as Anhui Conch DeclinesBloomberg News
China’s stocks fell for a third day, paring a weekly advance, as earnings from Anhui Conch Cement Co. disappointed investors and industrial shares slid.
Anhui Conch, China’s biggest cement maker, slumped 2.2 percent after first-half profit trailed estimates. China National Chemical Engineering Company Ltd., a construction company, sank 3.8 percent. Inner Mongolia Yili Industrial Group Co. led gains by milk-powder makers after the China Securities Journal said the government plans to consolidate the industry.
The Shanghai Composite Index dropped 0.7 percent to 2,067.62 at 9:59 a.m., paring its gain this week to 0.7 percent. The gauge has rebounded 6 percent since reaching a more than four-year low on June 27 as July data from exports to industrial output improved. About 54 percent of companies on the Shanghai index tracked by Bloomberg have reported quarterly results that trailed estimates.
“Earnings from major companies don’t look that good so far,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The market will remain cautious until the end of earnings season this month.”
The CSI 300 Index declined 0.8 percent to 2,303.60. The Hang Seng China Enterprises Index fell 1.2 percent.
Anhui Conch dropped to 15.82 yuan. Net income was 3.06 billion yuan ($500 million), trailing the average estimate of 3.13 billion yuan of analysts compiled by Bloomberg.
Holcim Ltd., the world’s largest cement producer, lowered its profit forecast for 2013 yesterday as the global economy grew less than expected in the first six months and demand fell short of forecasts.
Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., the nation’s biggest producer of rare earth, lost 1.5 percent to 28.86 yuan after saying net income fell 33 percent in the first half from a year earlier.
China Merchants Bank Co. declined 1.1 percent to 10.94 yuan after the lender won regulatory approval for the Hong Kong portion of a share sale that may be the world’s second-largest offering this year.
The bank was given permission by the China Securities Regulatory Commission to sell about 680 million Hong Kong-listed shares to existing shareholders, the company said yesterday. The regulator granted Merchants Bank approval on July 23 to sell 3.07 billion yuan-denominated shares in Shanghai. The lender said July 22 it planned to raise as much as 35 billion yuan ($5.7 billion).
Trading volumes in the Shanghai index were 0.6 percent higher than the 30-day average for this time of the day, according to data compiled by Bloomberg. The measure is valued at 8.4 times 12-month projected earnings, compared with the five-year average of 12.7 times.
Inner Mongolia Yili gained 1.1 percent to 35.26 yuan. Zhejiang Beingmate Technology Industry & Trade Co. rose 1.5 percent to 24.63 yuan. The Ministry of Industry and Information Technology submitted a plan to create 3-5 large companies with more than 5 billion yuan of annual baby formula sales by the end of 2018, the China Securities Journal reported, citing unidentified people.
Asian stocks fell today as improving U.S. economic data increased concern that the Federal Reserve will reduce stimulus. A report yesterday showed claims for jobless benefits unexpectedly dropped last week to the lowest level in almost six years. The cost of living rose in July for a third month, supporting the Fed’s forecast that inflation will move closer to its target.
— With assistance by Shidong Zhang