Bloomberg News

China’s Stock-Index Futures Advance Before Inflation Report

October 13, 2011

Oct. 14 (Bloomberg) -- China’s stock futures rose, signaling the benchmark index will extend this week’s gains, on speculation a report will show inflation eased, giving more room for the government to loosen its tightening policies.

Futures on the CSI 300 Index expiring in October added 0.3 percent to 2,659.40 as of 9:16 a.m. local time. The Shanghai Composite Index advanced 0.8 percent to 2,438.79 yesterday. after the government announced measures to help small companies hurt by the nation’s tight monetary policies. The measure has risen 3.4 percent this week. The CSI 300 Index gained 0.7 percent to 2,662.60 yesterday.

The statistics bureau is scheduled to report today consumer prices rose 6.1 percent in September from a year earlier, according to the median estimate of 22 economists surveyed by Bloomberg News. That would compare with 6.2 percent in August, a three-year high of 6.5 percent in July, and the government’s full-year target of 4 percent.

The Shanghai index has tumbled 13 percent this year, driving down estimated price earnings to 11.2 times, compared with the record low of 10.8 times set on Oct. 10, according to data compiled by Bloomberg. China has raised interest rates three times in 2011 and ordered lenders to set aside a bigger portion of their deposits to curb inflation, running near a three-year high.

China’s passenger-car sales rose at a faster pace for a fourth straight month in September as automakers offered discounts and consumers bought cars ahead of a week-long national holiday.


The Shanghai Composite is headed for its best weekly rally since June 24 on government support measures. Besides easier access to loans for smaller companies, Central Huijin Investment Ltd. began buying shares of the nation’s four-biggest lenders and Xinhua News Agency reported regulators approved cross-border exchange-traded funds.

The Hang Seng China Enterprises Index became the first of Asia’s major equity benchmark gauges to exit a bear market yesterday, rising 21 percent from the Oct. 4 low.

Spain had its credit rating cut one level by Standard & Poor’s as rising defaults threaten efforts to to stem Europe’s sovereign-debt crisis.

An escalation in Europe’s debt crisis may trigger a selloff in Asian assets, the International Monetary Fund said. Asia’s growth has slowed since the second quarter of 2011, the fund said in a report yesterday, cutting its forecast for this year’s expansion to 6.3 percent from an April estimate of 6.8 percent. Inflationary pressures across the region are still “elevated” and financial conditions remain accommodative in most of Asia, the IMF said.

Property Concerns

Conditions are not yet ripe for China to relax its tightening policies on the property market and some of the measures may be maintained as home sales in the first half of the year were still “sound,” Wang Yulin, deputy head of the policy research center at the Ministry of Housing and Urban- Rural Development said in an interview in today’s China Securities Journal.

The third-quarter real estate entrepreneur confidence fell to 99.9, the lowest since the first quarter of 2009, according to the National Bureau of Statistics. Developers’ confidence was the lowest among all eight industries for six straight quarters, it said. The index previously fell below 100 only in 2008/2009 financial crisis since records began in 1999 and dropped to a record low of 81.9 in the fourth quarter of 2008.

--Irene Shen. Editors: Allen Wan, Richard Frost

To contact the reporter on this story: Irene Shen in Shanghai at

To contact the editor responsible for this story: Shiyin Chen at

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