Low valuations pull index higher
By Lydia Chen |
June 8, 2011, Wednesday
|
Print Edition
Print Edition
SHANGHAI stocks edged up yesterday as investors believed valuations of most blue chips are close to bottom and viewed the European outbreak of E. coli as a boost for drug makers.
The Shanghai Composite Index added 0.6 percent to end at 2,744.30.
"June will be the best month for investors to decide where they should put their money on," said Huang Dongsheng, an analyst at Guodu Securities. "The valuations of most blue chips are now 50 percent cheaper."
He said that investor concerns about inflation, earnings growth and which direction the Chinese economy will turn to in the next half year may be more clearly known once economic data for May are released next Tuesday.
CSR Corp, China's biggest train maker, gained 3.5 percent to 6.85 yuan, after saying net income may surge more than 80 percent in the January-to-June period from a year earlier. Its operating revenue "increased noticeably," helped by the development of high-speed railways, the rail car maker said.
Shandong Lukang Pharmaceutical Co jumped by the daily cap of 10 percent to end at 8.75 yuan, as investors speculate antibiotics makers may see higher demand to treat the E. coli bacteria.
Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co jumped 7.2 percent to 78.01 yuan. The government of Inner Mongolia Autonomous Region, China's biggest rare earth producing region, plans to overhaul the rare earth industry. Baotou Steel Rare-Earth is the only firm approved to operate an upper-reach rare earth business in north China.
The Shanghai Composite Index added 0.6 percent to end at 2,744.30.
"June will be the best month for investors to decide where they should put their money on," said Huang Dongsheng, an analyst at Guodu Securities. "The valuations of most blue chips are now 50 percent cheaper."
He said that investor concerns about inflation, earnings growth and which direction the Chinese economy will turn to in the next half year may be more clearly known once economic data for May are released next Tuesday.
CSR Corp, China's biggest train maker, gained 3.5 percent to 6.85 yuan, after saying net income may surge more than 80 percent in the January-to-June period from a year earlier. Its operating revenue "increased noticeably," helped by the development of high-speed railways, the rail car maker said.
Shandong Lukang Pharmaceutical Co jumped by the daily cap of 10 percent to end at 8.75 yuan, as investors speculate antibiotics makers may see higher demand to treat the E. coli bacteria.
Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co jumped 7.2 percent to 78.01 yuan. The government of Inner Mongolia Autonomous Region, China's biggest rare earth producing region, plans to overhaul the rare earth industry. Baotou Steel Rare-Earth is the only firm approved to operate an upper-reach rare earth business in north China.
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