Cautious China Investors Lean to Properties, Steel

Gene Linn |

China stocks bulls are finding little room to maneuver in cautious, holiday-interrupted trading. But properties and steel makers are attracting some buying.

Properties are bearing the brunt of a barrage of new policies designed to stem alarming rises in property prices. However, measures rolled out in several major cities over the weekend were less stringent than expected, said Jackson Wong, vice president of sales at Tanrich Securities. This triggered a “relief rally,” he told Equities in an email, and the sector should remain strong this week.

Some of the biggest gainers were China Resources Land (CAOVY), China Overseas Land (CRBJY) and Poly Property (119, HK).

Beaten-down steel stocks such as Angang Steel (ANGGY) attracted some bottom-fishing after pre-announcing they would become profitable again in the most recent quarter, Wong said.

One sector that suffered from new government policies was banking. Small and medium-sized banks especially rely on wealth management products that have been tightly restricted by authorities. Minsheng Bank (CMAKY) was one of the hard-hit medium-sized banks.



Overall, said Wong, there is little to excite investors as the China gateway Hong Kong market reopened Tuesday from its Easter holiday and approaches the Ching Ming holiday on Thursday. The Hang Seng Index posted a modest 0.3% gain Tuesday in thin trading. End

DAILY FIX

Hong Kong Blue Chips: +68, +0.3, to 22,368, 4-2-13, Hang Seng Index.

Chinese Stocks in Hong Kong: -85, -0.8%, to 10,811, 4-2-13, HSCE Index.

Shanghai Stocks: -7, -0.3%, to 2,228, 4-2-13, Shanghai Composite Index.

Chinese Stocks in the U.S.: -2.7, 367.1, 4-1-13, Bank of New York Mellon, ADR Index-China

Insight: Hong Kong blue chips opened from the Easter holiday 96 points lower and ended with a modest gain in thin, volatile trading. Small and medium-sized Chinese banks dropped sharply after Chinese authorities restricted use of wealth management products. CITIC Bank (CHCJY), which also posted disappointing results, fell 6%. KGI Research

Quotable: "The loss of the 100-day MA resistance will be confirmed if HSI fails to hold the level of 21,975." Core Pacific Yamaichi. 4-1-13

Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.

For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN

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Companies

Symbol Name Price Change % Volume
SBNY Signature Bank 148.11 -0.43 -0.29 140,822

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