Small rebound seen 'short-lived'
By Lydia Chen |
May 6, 2011, Friday
|
Print Edition
Print Edition
SHANGHAI shares yesterday edged up, helped by real estate developers while concerns over inflation boosted defensive stocks such as drug makers and producers of consumer staples.
The Shanghai Composite Index added 0.2 percent to close at 2,872.40.
But the rebound was considered "short-lived" by Liu Kai, an analyst at Galaxy Securities Co, as he perceived no fundamental changes in the market.
"The rebound is more like a slight recovery from (Wednesday's) plunge, which was really overdone," Liu said. "But it doesn't mean the market would head to positive territory soon."
The concerns about inflation made defensive stocks stand out. Jiangsu Hengrui Medicine Co jumped 3.1 percent to 32.18 yuan.
"The health-care and pharmaceutical sectors could be safe investments now due to their previous hefty losses," Liu said. "These sectors are also likely to see annual net profit growth surpassing 20 percent this year.''
Despite the government's repeated tightening moves in the housing market, developers probably got a boost on news that China has ordered centrally-administered state-owned enterprises to be "actively involved" in building affordable houses to low-income residents. Huayuan Property Co surged 10 percent to 5.84 yuan.
The Shanghai Composite Index added 0.2 percent to close at 2,872.40.
But the rebound was considered "short-lived" by Liu Kai, an analyst at Galaxy Securities Co, as he perceived no fundamental changes in the market.
"The rebound is more like a slight recovery from (Wednesday's) plunge, which was really overdone," Liu said. "But it doesn't mean the market would head to positive territory soon."
The concerns about inflation made defensive stocks stand out. Jiangsu Hengrui Medicine Co jumped 3.1 percent to 32.18 yuan.
"The health-care and pharmaceutical sectors could be safe investments now due to their previous hefty losses," Liu said. "These sectors are also likely to see annual net profit growth surpassing 20 percent this year.''
Despite the government's repeated tightening moves in the housing market, developers probably got a boost on news that China has ordered centrally-administered state-owned enterprises to be "actively involved" in building affordable houses to low-income residents. Huayuan Property Co surged 10 percent to 5.84 yuan.
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