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Shanghai index up on stronger auto makers
By Lydia Chen |
January 28, 2011, Friday
|
Online Edition
Online Edition
SHAGNHAI'S key stock index closed higher today, posting the biggest five-day gain for the market in six weeks, thanks to a rally among auto makers.
Shares in the automaking industry were considered undervalued compared with their encouraging earnings growth forecasts, according to analysts.
The Shanghai Composite Index reversed morning trading losses and added 0.13 percent to 2,752.75. The index gained 1.4 percent this week. Turnover today declined to 98.48 billion yuan (US$14.97 billion) from yesterday's 115.25 billion yuan.
FAW Car Co hiked 4.22 percent while SAIC, China's largest auto maker by market value, rose 3.6 percent to 17.33 yuan, its highest in two months. SAIC tumbled 27 percent last year among other industry peers on fears over slower sales growth with subsidies being scrapped and a car license quota being imposed in Beijing.
China International Capital Corp suggested investors buy into leading auto makers such as SAIC, Fuyao Glass Industry Group Co and Beiqi Foton Motor Co, as their valuations drop below 10 times estimated earnings for this year, close to the low end of the historical average.
"Sales and earning prospects of car makers are expected to beat expectations, thus bringing investors more opportunities," The leading Chinese investment bank said in a note today.
Shares in the automaking industry were considered undervalued compared with their encouraging earnings growth forecasts, according to analysts.
The Shanghai Composite Index reversed morning trading losses and added 0.13 percent to 2,752.75. The index gained 1.4 percent this week. Turnover today declined to 98.48 billion yuan (US$14.97 billion) from yesterday's 115.25 billion yuan.
FAW Car Co hiked 4.22 percent while SAIC, China's largest auto maker by market value, rose 3.6 percent to 17.33 yuan, its highest in two months. SAIC tumbled 27 percent last year among other industry peers on fears over slower sales growth with subsidies being scrapped and a car license quota being imposed in Beijing.
China International Capital Corp suggested investors buy into leading auto makers such as SAIC, Fuyao Glass Industry Group Co and Beiqi Foton Motor Co, as their valuations drop below 10 times estimated earnings for this year, close to the low end of the historical average.
"Sales and earning prospects of car makers are expected to beat expectations, thus bringing investors more opportunities," The leading Chinese investment bank said in a note today.
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