China’s Stocks Rise for First Time in Four Days After Trade Data

China’s stocks rose for the first time in four days after the nation’s exports climbed more than forecast.

Guangzhou Baiyunshan Pharmaceutical Holdings Co. surged 10 percent after announcing plans to raise as much as 10 billion yuan ($1.6 billion) by selling shares. Xinjiang Urban Construction (Group) Co. and Xinjiang Beixin Road & Bridge Construction Co. gained at least 1.5 percent after the Shanghai Securities News said China will introduce a so-called New Silk Road plan soon that will offer preferential policies to Xinjiang province. Cement maker BBMG Corp. slid 3.7 percent after estimating net income dropped last year.

“The trade data bolstered confidence that the stock rally still has some fundamental support,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Thematic stocks are getting attention now as big-cap stocks take a break.”

The Shanghai Composite Index rose 0.2 percent to 3,235.30 at the close. It dropped 1.7 percent to 3,229.32 yesterday amid concern a rally for the world’s best-performing equities market over the past year has been excessive relative to the outlook for the economy.

The CSI 300 Index was little changed. Hong Kong’s Hang Seng China Enterprises Index climbed 0.4 percent, while the Hang Seng Index advanced 0.8 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, retreated 1.2 percent yesterday.

Trade Data

Exports rose 9.7 percent in December from a year earlier, exceeding the 6 percent median estimate in a Bloomberg News survey. Imports fell 2.4 percent, compared with projections for a 6.2 percent decline, leaving a trade surplus of $49.61 billion, the customs administration said in Beijing.

“China’s exports will be enough to provide support for overall growth, but won’t be strong enough to spark a rebound,” said Li Miaoxian, Beijing-based economist at Bocom International Holdings Co. “The better-than-expected performance of imports showed China’s domestic demand isn’t that weak -- in fact, it’s quite stable if the distortion from the oil price fall is excluded.”

The Shanghai Composite has surged 61 percent over the past year, the best performers among 93 global indexes tracked by Bloomberg, amid speculation the government will loosen monetary policy to support economic growth. The Shanghai Composite traded at 12.3 times 12-month projected earnings last week, the highest level since May 2011, according to data compiled by Bloomberg.

Citigroup Inc. recommended rotating out of brokerages into health-care companies as it cut its rating for CSI 300 stocks to neutral. The U.S. bank said economic fundamentals don’t support further gains for the index and earnings won’t grow as robustly as in previous bull markets.

Silk Road

Baiyunshan Pharmaceutical surged to the highest level since December 2013. The company plans to sell as many as 419.5 million A shares to five buyers including its controlling shareholder, it said in an exchange statement. The proceeds will be used to increase capital and replenish working capital.

Citigroup downgraded brokerages to underweight from overweight. Citic Securities Co., the nation’s biggest listed brokerage, fell 2.5 percent while Haitong Securities Co., the second largest, slid 2.6 percent.

Xinjiang Urban Construction added 1.9 percent while Xinjiang Beixin rose 1.5 percent. The Silk Road plan comprising a land-based belt and a maritime route has been approved and will be announced soon, the Shanghai Securities News reported today, citing an unidentified person familiar with the matter. The central government will give preferential policies to Xinjiang as it plays a key role in the plan, it said.

BBMG fell to the lowest level since Dec. 24 after estimating 2014 net income will drop by as much as 25 percent.

— With assistance by Shidong Zhang

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