Bloomberg News

China’s Stocks Rise for First Time in Six Days on Export Growth

November 12, 2012

China’s stocks rose, driving up the benchmark index for the first time in six days, after the nation’s export growth exceeded forecasts and regulators announced steps to boost investment into equities.

China Cosco Holdings Co. (601919), the world’s largest operator of dry-bulk ships, advanced the most in almost two weeks after data showed the country’s overseas shipments increased 11.6 percent in October. GF Securities Co. (000776) gained 1.9 percent, leading brokerages higher as the securities regulator said it will allow more yuan raised overseas to be invested in local stocks and bonds. The equity market’s gains were capped by a report showing new bank loans unexpectedly declined 14 percent in October.

The Shanghai Composite Index (SHCOMP) rose 0.5 percent to 2,079.27 at the close. The CSI 300 Index (SHSZ300) climbed 0.5 percent to 2,251.85. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slipped 0.1 percent. The Bloomberg China-US 55 Index (CH55BN) added 0.3 percent in New York on Nov. 9.

“October economic data including exports have confirmed the economy is stabilizing,” said Wu Kan, a fund manager at Dazhong Insurance Co. in Shanghai, which oversees $285 million. “The program to attract more yuan investment is positive news and it will boost stock performance in the long term. The market is waiting for further catalysts.”

The Shanghai Composite fell 2.3 percent last week as the Communist Party started a meeting to decide a new generation of leaders. The index trades at 9.9 times estimated profit for 2012, compared with the 17.9 average multiple since Bloomberg began compiling the weekly data in 2006. It remains down 5.5 percent this year on concern economic growth will decelerate.

Export Growth

Trading volumes in the gauge were 16 percent lower than the 30-day average, data compiled by Bloomberg show. Thirty-day volatility was at 15.9, lower than this year’s average of 17.2.

China Cosco retreated 1.5 percent to 4.11 yuan, the biggest drop since Oct. 30. China Shipping Container Lines Co. (601872), the country’s second-largest carrier of sea-cargo boxes, added 1.3 percent to 2.28 yuan.

October export growth compared with the 10 percent estimate in a Bloomberg News survey of economists and was the fastest rate since May. Imports rose 2.4 percent, the same pace as the previous month. The trade surplus widened to $32 billion, the biggest in almost four years.

October data on industrial production, fixed-asset investment and retail sales all exceeded economists’ forecasts while declines in producer prices eased, the statistics bureau said on Nov. 9.

Yuan Loans

New local-currency lending was 505.2 billion yuan ($81.1 billion) in October, the People’s Bank of China said. That trailed the median 590 billion yuan estimate in a Bloomberg News survey of economists and 586.8 billion yuan a year earlier.

Guangzhou-based GF Securities, the nation’s third-biggest brokerage by market value, climbed 1.9 percent to 12.51 yuan. Citic Securities Co. (600030), the largest, gained 0.7 percent to 10.86 yuan.

Regulators agreed in principle to increase the quota for the Renminbi Qualified Foreign Institutional Investor program by 200 billion yuan, Guo Shuqing, chairman of the securities regulator, said at a briefing in Beijing yesterday. The current quota is 70 billion yuan.

China also plans bigger tax deductions on dividends for long-term investors, the Xinhua News Agency reported over the weekend.

The securities regulator sped up the approval process for initial public offerings last week, China Business News reported today, citing an unidentified person. A total of 792 companies were awaiting approval as of Nov. 8 and 91 approved companies haven’t yet sold initial public offering shares, the newspaper said, citing CSRC data.

Consumer Spending

A measure of consumer-staple stocks in the CSI 300 dropped 1.3 percent, the most among 10 industry groups, on concern a slowdown in economic growth will curb consumer spending.

Kweichow Moutai Co., China’s biggest producer of baijiu liquor by market value, fell 1.4 percent to 231.46 yuan, trimming its gain to 20 percent this year. Jiangsu Yanghe Brewery Joint-Stock Co. (002304) lost 4.2 percent to 108.75 yuan.

The iShares FTSE China 25 Index Fund (FXI:US), the biggest Chinese exchange-traded fund in the U.S., slid 0.2 percent on Nov. 9 to $36.46 for a weekly drop of 2.7 percent, the most since the end of August.

--Zhang Shidong. Editors: Allen Wan, Richard Frost

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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