China’s Stocks Rise to Pare Biggest Weekly Drop in Two MonthsWeiyi Lim
China’s stocks rose, paring the benchmark index’s biggest weekly loss in two months, as technology and property shares rebounded from losses triggered by concern the resumption of new share sales will divert funds.
Anhui USTC iFlytek Co., a maker of voice-recognition software similar to Apple Inc.’s Siri system, gained 6.8 percent after falling the most in a month yesterday. Gemdale Corp. led gains for real-estate developers. Gauges of technology and property companies were the best performers today after sliding at least 1.9 percent this week.
The Shanghai Composite Index added 0.2 percent to 2,026.67 at the close. The gauge dropped 2.1 percent this week as at least five companies marketed shares to investors and data showed the nation’s home prices declined for the first time in almost two years.
“New IPOs have been diverting the funds from the market,” said Du Liang, an analyst at Shanxi Securities Co. in Beijing. “In the near-term, the stock market is at a dangerous stage. If we breach the Shanghai Composite’s psychological support level of 2,000, we could tumble further. Other factors like falling housing prices are also weighing on sentiment.”
The CSI 300 Index advanced 0.5 percent, while the Hang Seng China Enterprises Index climbed 0.4 percent. The Bloomberg China-US Equity Index dropped 0.7 percent in New York yesterday.
A gauge of technology shares in the CSI 300 rose 1 percent, paring this week’s loss to 1.9 percent. The ChiNext index snapped a three-day slide, also gaining 1 percent. Anhui USTC surged to a two-month high. Tianjin Zhonghuan Semiconductor Co. advanced 2.6 percent. Beijing Originwater Technology Co., which has the third-biggest weighting on the ChiNext index, rebounded 1.7 percent after sliding 2.1 percent yesterday.
Regulators are restarting the market for IPOs after a four-month halt in new deals. Jiangsu King’s Luck Brewery Joint-Stock Co. today priced its shares at 12.54 times reported earnings, compared with the industry average of 12.55 times, according to its prospectus. About 100 Chinese companies will sell shares in mainland IPOs by year-end, China Securities Regulatory Commission Chairman Xiao Gang said on May 19.
Gemdale jumped 4.2 percent after dropping 1.1 percent yesterday. China Vanke Co., the biggest listed developer, rose 1.8 percent after slumping 5.2 percent over the past four days
Chinese property trusts face record repayments next year as the real-estate market cools, fueling speculation among bond funds that more developers will collapse.
The trusts, which channel money from wealthy individuals to smaller builders that have trouble obtaining financing elsewhere, must repay 203.5 billion yuan ($32.7 billion) in 2015, according to Use Trust, a Chinese research firm. That’s almost double the 109 billion yuan due this year. New issuance of the products slumped to 40.7 billion yuan this quarter, the least in more than two years, Use Trust data show.
Prices fell in 35 of the 70 cities tracked by the government last month from April, according to a statement by the National Bureau of Statistics on June 18, the most since May 2012. In the financial center of Shanghai, prices decreased 0.3 percent from April, the first decline in two years.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., dropped 0.9 percent yesterday, declining the most in eight weeks.
Chinese online retailers from E-Commerce China Dangdang Inc. to Jumei International Holding Ltd. dropped in U.S. trading on concern a government campaign against sales of counterfeit goods will crimp revenue.