Stocks rocket 3.73%, regain 4,000-point ground
Updated: 2007-07-20 16:28
According to the National Bureau of Statistics (NBS) yesterday, China's gross domestic product (GDP) grew 11.5 percent to 10,676.8 billion yuan in the first half. The growth rate was 0.5 percentage points higher than that of the same period last year. GDP growth for the second quarter hit 11.9 percent, the highest in 12 years. Trade surplus was 112.5 billion yuan for the first half.
On the other hand, the consumer price index (CPI), a key indicator of inflation, rose 4.4 percent last month, the highest in 33 months. For the first half, CPI rose 3.2 percent, higher than the 3 percent alert line set by the central bank. Food price was the largest inflationary pressure, contributing to 2.5 percent of the total, said NBS. Analysts believe the central bank may raise interest rates again this month to curb excessive liquidity and cool down the investment wave.
Analysts pinned down three growth sectors upon the first half macro economic data. They believe investment opportunities will emerge in the retail and consumer goods, machinery and steel industries.
In the first half, average disposable income of urban residents rose 14.2 percent after deduction of price fluctuation factors to 7,052 yuan. The growth rate was 4 percentage points higher than that of the same period last year. The direct effect of the increase in disposable income will be stipulation of consumption, said economists.
As a result, the retail and wholesale index bypassed previous records yesterday, when the market was still in intensive price adjustments.
For the machinery sector, the national added value rose 18.5 percent on a fast growth path in the first half year. For the steel industry, the total profit reached 902.6 billion yuan, up 42.1 percent. The speed for growth was 16.6 percentage points faster than that of last year.
Securities houses including CITIC, Guoxin and China Merchants, and mututal funds are currently recommending or buying in the stocks in the three sectors. Investors may also gain from following suit, said analysts.
This also accords with the hefty profits of mutual funds, the largest investors in the second quarter. China's 323 mutual funds earned a combined 221.31 billion yuan in the second quarter, up 51.6 percent from the first quarter as a new quarterly record. Their investment directors were on stocks in the finance, real estate, machinery and mining sectors, according to industrial statistics.
There is news for the long-awaited index futures: chief of the research and development department of the Shanghai Financial Futures Exchange said that the timetable for the launch of China's first financial futures based on the CSI 300 index might be released earlier than the original schedule. Such a plan aims to help the market digest the information in advance, said Zhang.
On the other hand, sources revealed that the Ministry of Finance will issue the first batch of the special treasury bonds worth of 850 billion yuan. Upon exchanging US dollar reserves for the bonds, the central bank may be sold to the Agricultural Bank of China through asset disposal.
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