Biggest weekly increase in six weeks
By Lydia Chen |
January 29, 2011, Saturday
|
Print Edition
Print Edition
Shanghai stocks rose yesterday, driving the key index to its biggest weekly gain in six weeks, boosted by a rebound among auto makers.
The Shanghai Composite Index edged up 0.1 percent to close at 2,752.75. The index gained 1.4 percent this week, the most since the five days ended December 17.
Shares of auto makers were undervalued compared with their earnings growth forecasts, analysts said.
China International Capital Corp suggested investors buy leading auto makers such as SAIC and Beiqi Foton Motor Co, as their valuations drop below 10 times estimated earnings for this year.
"Sales and earning prospects of car makers are expected to surpass expectations, which will bring investors more opportunities," CICC said in a note yesterday.
It forecast car makers may see an average 8.8 percent growth in profits before tax this year.
SAIC Motor Corp, China's largest auto maker, rose 3.6 percent to 17.33 yuan, its highest close in two months. SAIC fell 27 percent last year on fears of slower growth in sales hit by the scrapping of subsidies and a car plate quota imposed in Beijing.
Developers fell after Shanghai and Chongqing introduced a property tax. Poly Real Estate fell 1.2 percent to 13.08 yuan.
The Industrial and Commercial Bank of China declined 0.7 percent to 4.21 yuan after Zhou Xiaochuan, governor of the central bank, said bank reserve requirement ratio - at a record 19 percent - will be raised further.
The Shanghai Composite Index edged up 0.1 percent to close at 2,752.75. The index gained 1.4 percent this week, the most since the five days ended December 17.
Shares of auto makers were undervalued compared with their earnings growth forecasts, analysts said.
China International Capital Corp suggested investors buy leading auto makers such as SAIC and Beiqi Foton Motor Co, as their valuations drop below 10 times estimated earnings for this year.
"Sales and earning prospects of car makers are expected to surpass expectations, which will bring investors more opportunities," CICC said in a note yesterday.
It forecast car makers may see an average 8.8 percent growth in profits before tax this year.
SAIC Motor Corp, China's largest auto maker, rose 3.6 percent to 17.33 yuan, its highest close in two months. SAIC fell 27 percent last year on fears of slower growth in sales hit by the scrapping of subsidies and a car plate quota imposed in Beijing.
Developers fell after Shanghai and Chongqing introduced a property tax. Poly Real Estate fell 1.2 percent to 13.08 yuan.
The Industrial and Commercial Bank of China declined 0.7 percent to 4.21 yuan after Zhou Xiaochuan, governor of the central bank, said bank reserve requirement ratio - at a record 19 percent - will be raised further.
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