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Stocks end low on profitability woes
By Ye Zhen |
September 5, 2012, Wednesday
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Print Edition
Print Edition
SHANGHAI stocks fell yesterday on concerns listed companies' profitability will plummet further amid fears the nation?s economy is unlikely to recover in the near future.
The Shanghai Composite Index dropped 0.75 percent to settle at 2,043.65 points, the lowest level since February 2, 2009.
Nearly 50 percent of the 945 companies listed on the Shanghai and Shenzhen markets predicted a decline in profits in the third quarter, the 21st Century Business Herald reported.
Latest PMI data showed China?s manufacturing activity contracted at a faster pace in August, dampening hopes the nation?s economy will regain growth momentum in the second half of this year.
òA wider-than-expected fall in PMI data for August indicates China?s economy hasn?t bottomed out and is still under high downward pressure,ó Founder Securities said in a report.
Lenders led the market down as worries mount that an increase in bad loans may threaten the prospects of the banking sector. The Industrial and Commercial Bank of China Ltd, the nation?s largest lender, declined 0.8 percent to 3.74 yuan (59 US cents). The Bank of Communications fell 1.6 percent to 4.21 yuan. China Merchants Bank lost 1.7 percent to 9.84 yuan.
Property developers lost amid policy uncertainty. Poly Real Estate, the nation?s second-largest listed developer, sank 1.8 percent to 9.95 yuan. Gemdale Corp slumped 1.9 percent to 5.13 yuan.
Home sales in China are likely to increase in the next two months as developers begin to launch new properties, but policy risks are expected to constrain growth, said Zhang Dawei, chief market analyst at Zhongyuan Real Estate, a property agent.
Kweichow Moutai Co, a high-end liquor producer, jumped 6.2 percent to 233.43 yuan after announcing plans to raise factory gate prices of some its products by 20 to 30 percent.
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