Equities end up on gains by financials

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(China Daily/Agencies)
Updated: 2009-09-25 08:29

Chinese shares ended slightly higher yesterday as falling transport rates spurred declines in shipping companies and overshadowed the gains by financial companies.

Shanghai International Port (Group) Co, the operator of the country's busiest harbor, lost 3.1 percent and China Shipping Development Co slid 1.2 percent as a measure of shipping costs for commodities declined for a ninth session. Industrial Bank Co rallied 5.5 percent, paring its loss from its high this year to 21 percent.

Almost two stocks fell for each that rose on the Shanghai Composite Index, which added 10.83, or 0.4 percent, to 2,853.55. The gauge traded between a loss of 2.1 percent and a gain of 1.5 percent yesterday, after closing at a three-week low on Wednesday. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, gained 0.7 percent to 3,080.93.

"Investors are split on what shape the recovery and corporate earnings growth will take in the fourth quarter," said Zhang Xiuqi, a Shanghai-based strategist at China International Fund Management Co, which oversees about $10.2 billion. "The market is expected to trade around this level until more indicators emerge."

Companies on the Shanghai index trade at 31.56 times reported earnings, compared with last year's low of 12.87 times, Bloomberg data showed.

Gains were also limited on concern a flood of initial public offerings on China's new start-up board will draw funds away from existing equities.

The Shanghai Composite has slumped 18 percent since this year's peak on Aug 4 on speculation a plunge in new lending will damp domestic spending and stifle economic growth. Overseas demand for the nation's products has yet to recover amid the global recession, with exports tumbling 23.4 percent in August from a year earlier.

"The market is no longer so optimistic about the economic rebound," Wang Lei, who helps oversee $530 million at Lombarda China Fund Management Co, said in an interview in Shanghai.

Hang Seng declines

Hong Kong stocks declined, led by resource companies, as commodity prices dropped and Metallurgical Corp of China Ltd fell below its initial public offering price.

China Metallurgical, the construction company that helped build the "Bird's Nest" Olympic stadium in Beijing, tumbled 12 percent on its first day of trade.

The Hang Seng Index sank 2.5 percent to 21,050.73 at the close, the steepest drop since Aug 17. The gauge has surged 86 percent from a four-month low on March 9 as stimulus measures revived economies around the world. Shares on the Hang Seng Index are priced at an average 17 times estimated profit, up from 10.6 times at the start of 2009.

The Hang Seng China Enterprises Index slid 3.1 percent to 12,047.25.

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