China’s Stocks Rise as Consumer Shares Gain Before NPC MeetingKyoungwha Kim
China’s stocks rebounded from the biggest loss in a month as consumer and health-care companies rallied amid data showing an expansion in services and policy speculation during this week’s National People’s Congress.
Jiangsu Phoenix Publishing & Media Corp. soared 10 percent as media shares led gains for consumer companies reliant on economic growth. Xizang Haisco Pharmaceutical Group Co. also jumped by the daily limit, helping a gauge of health-care providers to the biggest gain among industry groups. Beijing SDL Technology Co. Ltd. sank 1.7 percent after surging by the daily limit for two straight days.
The Shanghai Composite Index rose 0.5 percent to 3,279.53 at the close, after dropping 2.2 percent on Tuesday. The Services Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics climbed to 52 last month from January’s 51.8.
“The services PMI suggests China’s economy is about as solid in early 2015 as it was in early 2014,” said Bill Adams, senior international economist at PNC Financial Services Group. “There are still no signs of a collapse in growth in China.”
The CSI 300 Index added 0.7 percent. Hong Kong’s Hang Seng China Enterprises Index slid 1.7 percent, while the Hang Seng Index slipped 1 percent.
The Shanghai gauge has rallied 42 percent in the past six months and trades at 12.3 times estimated earnings for the next 12 months, compared with the five-year average multiple of 10.3, according to data compiled by Bloomberg.
China’s leaders are gathered this week in Beijing, where they’ll map out policies on state-owned enterprises, the environment, and deliver the nation’s budget. Premier Li Keqiang is expected to announce a 2015 economic growth goal of about 7 percent on Thursday, when the NPC starts its annual meeting, down from last year’s 7.5 percent.
“People are hopeful that there will be new policies announced to support growth,” said Yan Liu, a Shenzhen-based trader at Guosen Securities Co.
Gauges of drug and consumer companies climbed at least 1.9 percent for the best performance among 10 industry groups. Harbin Pharmaceutical Group climbed 3.9 percent. Beijing Enlight Media Co. jumped 10 percent, while TCL Corp. surged 7.5 percent.
Chai Jing’s anti-pollution documentary video, “Under the Dome,” which got more than 100 million clicks on major Internet portals, has macro implications in China, according to Zhang Zhiwei, head of China equity strategy at Deutsche Bank AG. The video suggests the government will likely take environmental protection more seriously and rebalance the economy, Zhang wrote in a note.
“The media sector has been heavily regulated with little space for independent producers like Chai Jing,” Zhang said. “The popularity of her video shows that there is significant room for productivity growth if the government allows more private investment to enter sectors currently monopolized by” state-owned enterpises, he said.
Beijing SDL completed its first drop in six days, snapping a five-day advance.
In Hong Kong, financial and energy stocks led declines. Haitong Securities Co. and China Life Insurance Co slid more than 2 percent, while China Coal Energy Co. lost 2.2 percent.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.