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Money

Stocks rise on strong export growth

By Zhang Shidong (China Daily)
Updated: 2011-05-11 13:21
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SHANGHAI - Stocks on the Chinese mainland rose, driving the benchmark index's biggest gain in a week, as a jump in exports to a record bolstered confidence the world's second-biggest economy can avoid a slump in growth.

Yanzhou Coal Mining Co led an advance for coal producers after the price of the fuel climbed to the highest in more than two years and the nation's exports exceeded economists' estimates last month. Guangxi Guidong Electric Power Co had the biggest two-day gain in three years on prospects the government will boost hydropower supply to offset power shortages.

"The trade data are in line with expectations and reinforced the view that there's no risk of a hard landing for the economy," said Wu Kan, a fund manager at Dazhong Insurance Co, which oversees $285 million. "The government is continuing its battle against inflation, and monetary policies aren't likely to be relaxed in the near future."

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The Shanghai Composite Index climbed 18.2 points, or 0.6 percent, to 2890.63 at the 3 pm close. The CSI 300 Index advanced 0.8 percent to 3153.22. The MSCI Emerging Markets Index added 0.2 percent. Hong Kong's stock market was shut on Tuesday for a holiday.

The Shanghai Composite has declined 5.5 percent from a five-month high on April 18 amid concern the government will add to the 10 increases in lenders' reserve-ratio requirements and four rises in interest rates since early last year to cool inflation. The losses pared the gauge's advance this year to 2.9 percent.

Chinese exports rose 29.9 percent in April from a year earlier and imports climbed 21.8 percent, leaving a trade surplus of $11.42 billion, the General Administration of Customs said on Tuesday. The median estimate in a Bloomberg News survey of 27 economists was for a $3.2 billion trade surplus. Analysts forecast a 29.5 percent gain in exports and a 28.9 percent increase in imports.

Export growth is "still quite robust", spurred by Japanese imports of Chinese consumer staples after the earthquake, according to Bank of America-Merrill Lynch.

"The return of a trade surplus might be market-positive, but the slowing import growth might worry some investors, who are concerned about a hard landing in China," Ting Lu, an economist at the bank, said in a report.

A definite positive is "China's export growth, which displays strong resilience under the headwinds of rising labor costs, rising interest rates, RMB appreciation and surging raw-material prices".

The nation's consumer prices may have risen 5.2 percent last month, based on a survey of economists by Bloomberg News.

The inflation figures are scheduled to be released on Wednesday.

The March inflation rate was 5.4 percent, the highest since 2008.

Bloomberg News

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