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Shanghai shares outperform Asian peers amid global rout
By Lydia Chen |
August 9, 2011, Tuesday
|
Online Edition
Online Edition
SHARES in Shanghai traded slightly lower today, outperforming most markets in Asia-Pacific region that are still struggling to recover from a Monday rout under the weight of danger of recession in the United States and a debt crisis in Europe.
The Shanghai Composite Index opened 2.33 percent lower but managed to pull back from losses and closed 0.03 percent lower to 2,526.07. Turnover was at 107.7 billion yuan (US$16.75 billion), shy from yesterday's 117.6 billion yuan.
However, the relatively more stable performance, which came after China reported its monthly inflation quickened to a higher-than-expected 6.5 percent in July, could only be "short-lived," some analysts said.
Banks and developers took the credit for stabilizing the market today after China Vanke and China Merchants Bank both said net profits have seen growth in the first six months.
China Vanke, the country's largest developer, jumped 2.98 percent to 2.30 yuan. China Merchants edged up 0.77 percent to 5.21 yuan. Industrial & Commercial Bank of China, China's largest lender, advanced 1.74 percent to 4.10 yuan.
China Vanke said in its half-year earning report that its revenue from January to June climbed 19.2 percent from a year ago to 19.99 billion yuan. Net profit rose year-on-year of 5.9 percent to 2.98 billion yuan.
China Merchants, the nation's sixth largest lender in terms of market value, saw half-year revenue hiked 39.67 percent from a year earlier to 46 billion yuan while net profit rocketed 40.12 percent to 18.5 billion yuan.
However, the strength in the real estate firms and banks, two biggest heavyweight sectors in the Shanghai market, is not likely to reverse the current volatility to a gaining momentum, said Zhang Qi, an analyst with Haitong Securities.
"Investors should understand that problems, such as companies' excessive demands for money raising, are still there and will continue to cripple the market," said Zhang.
Han Hao, an analyst with China Minzu Securities, expected the market would go further down since the country's economy will be largely affected by the debt crisis in the US and Europe, China's two largest trade partners.
But Citic Bank said in a report today that it expected China's stock market to see a 20 percent rebound in recent trading and projects its target at 3,400 points.
"China's tightening that are already in place for some time will start to take effect," Qiu Sisheng, director of investment research department of Citic Bank, said in the report.
"The slowing growth in the West will help China lower its inflation thanks to cheaper prices of commodities," Qiu said. "This may offer a chance for the government to change its tightening policies and provide support for the stock markets."
The Shanghai Composite Index opened 2.33 percent lower but managed to pull back from losses and closed 0.03 percent lower to 2,526.07. Turnover was at 107.7 billion yuan (US$16.75 billion), shy from yesterday's 117.6 billion yuan.
However, the relatively more stable performance, which came after China reported its monthly inflation quickened to a higher-than-expected 6.5 percent in July, could only be "short-lived," some analysts said.
Banks and developers took the credit for stabilizing the market today after China Vanke and China Merchants Bank both said net profits have seen growth in the first six months.
China Vanke, the country's largest developer, jumped 2.98 percent to 2.30 yuan. China Merchants edged up 0.77 percent to 5.21 yuan. Industrial & Commercial Bank of China, China's largest lender, advanced 1.74 percent to 4.10 yuan.
China Vanke said in its half-year earning report that its revenue from January to June climbed 19.2 percent from a year ago to 19.99 billion yuan. Net profit rose year-on-year of 5.9 percent to 2.98 billion yuan.
China Merchants, the nation's sixth largest lender in terms of market value, saw half-year revenue hiked 39.67 percent from a year earlier to 46 billion yuan while net profit rocketed 40.12 percent to 18.5 billion yuan.
However, the strength in the real estate firms and banks, two biggest heavyweight sectors in the Shanghai market, is not likely to reverse the current volatility to a gaining momentum, said Zhang Qi, an analyst with Haitong Securities.
"Investors should understand that problems, such as companies' excessive demands for money raising, are still there and will continue to cripple the market," said Zhang.
Han Hao, an analyst with China Minzu Securities, expected the market would go further down since the country's economy will be largely affected by the debt crisis in the US and Europe, China's two largest trade partners.
But Citic Bank said in a report today that it expected China's stock market to see a 20 percent rebound in recent trading and projects its target at 3,400 points.
"China's tightening that are already in place for some time will start to take effect," Qiu Sisheng, director of investment research department of Citic Bank, said in the report.
"The slowing growth in the West will help China lower its inflation thanks to cheaper prices of commodities," Qiu said. "This may offer a chance for the government to change its tightening policies and provide support for the stock markets."
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