Markets

Stocks edge up on expectations of rosy exports

By Zhang Shidong (China Daily)
Updated: 2010-09-07 11:42

SHANGHAI - Mainland stocks rose to the highest in four months as Macquarie Securities Ltd and BNP Paribas recommended shares with large capitalizations and improving US economic data bolstered the outlook for Chinese exports.

Baoshan Iron & Steel Co climbed the most in nine months after Shenyin & Wanguo Securities Co said steelmakers may improve their profitability.

China Petroleum & Chemical Corp and coal producer China Shenhua Energy Co led gains for energy producers after Macquarie said large caps may benefit at the expense of smaller companies.

China Life Insurance Co and Ping An Insurance (Group) Co advanced at least 2.8 percent after insurers were allowed to diversify their investments.

"The market consensus is that the economy won't have a double-dip," said Zheng Tuo, president of Shanghai Good Hope Equity Investment Management Co. "The rally for big-cap stocks reflected the optimism about the economy."

The Shanghai Composite Index rose 40.86, or 1.5 percent, to 2,696.25 on Monday, the highest since May 14. The CSI 300 Index added 1.9 percent to 2,975.09 on Monday.

BNP Paribas recommended mainland large-capitalization stocks, citing "low" valuations, "minimal" earnings risk and "high sensitivity" to an easing in government policy.

A gauge of energy stocks rose 2.9 percent on Monday for the steepest gain among the 10 industry groups in the CSI 300 Index.

The Standard & Poor's 500 Index rose 1.3 percent on Friday as a report showed companies in the United States added more jobs than forecast in August.

Private payrolls climbed 67,000 after a revised 107,000 increase in July that was more than initially estimated, according to Labor Department figures in Washington.

The US, the world's biggest economy, accounts for about 20 percent of China's exports.

Steel prices may rise about 300 yuan ($44.2) a ton within two months, as the government's push to cut emissions reduces steel supplies and iron ore prices are expected to drop in the fourth quarter, wrote Zhao Xiang'e, an analyst at Shenyin & Wanguo Securities, in a report on Monday.

Baoshan Steel may raise October product prices by about 200 yuan, it said.

Hebei province, China's biggest province by steel production, shut 57 steelmaking blast furnaces and production lines from Saturday after local governments restricted power, researcher Mysteel.com said.

China has approved insurers to hold stakes and invest in property assets of privately held companies to reduce investment risks.

The rules are aimed at "easing insurers' investment pressure and diversifying risks", the China Insurance Regulatory Commission said on Sunday in a statement.

China Life, the nation's biggest insurer, added 2.8 percent to 22.81 yuan. Ping An, the second biggest, rose 4.5 percent to 51.06 yuan.

Hang Seng gains

Hong Kong stocks rose, lifting the Hang Seng Index to the highest close in almost a month, as better-than-estimated US job data bolstered the outlook for the global economy. Developers gained after the government announced a land sale scheduled for next month.

The Hang Seng advanced 1.8 percent to 21,355.77 on Monday, its highest close since Aug 10. Concern over global economic growth will slow has dragged down the index by 2 percent from a four-month high on Aug 9. Shares on the measure trade at an average of 13.8 times estimated earnings. The Hang Seng China Enterprises Index of H shares of mainland companies gained 1.6 percent to 11,960.57 on Monday.

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