China Stocks rebounded Friday after falling Thursday after rising Wednesday and Tuesday after falling … you get the idea. The up-and-down movement of the last two weeks may continue next week.
Hong Kong’s blue-chip Hang Seng Index gained 0.8%, 174 points, Friday to close at 21,562. The Index ended this week’s bumpy ride up 0.7%, 155 points. The index of Chinese companies on Friday rose 1.2%, 136 points, to 11,739, an increase of 0.04% for the week. Turnover remained subdued Friday.
The market is more or less balanced between positive and negative factors, according to Ben Kwong, chief operating officer for KGI Asia.
Positives include investors’ willingness to take more risks after global stock exchanges stabilized recently, boosting funds to emerging markets, he said. On the other hand lackluster corporate results on top of big gains in the first six weeks of the year is blunting upward momentum.
Positives have a slight edge, Kwong told Equities in an email, in that there is not much downside for the Hang Seng in the short term.
It is tough to find long-term winners in the current stagnant market. “…(S)ector rotation will be the key in the near term,” Kwong said. “Individual sector(s) (like mainland property on Thursday) might have very volatile share price performance on a sudden driving factor.”
In addition, the National Peoples Congress, starting next week, is expected to announce policies favoring agricultural and water treatment companies. Kwong said there is talk China might cut taxes to improve consumption, benefiting consumer plays. End
Hong Kong Blue Chips: +174, +0.8%, to 21,563, 03-02-12, Hang Seng Index
Chinese Stocks in Hong Kong: +136, +1.2%, to 11,739, 03-02-12, HSCE Index
Shanghai Stocks: +1.5% to 2,461, 03-02-12, Shanghai Composite Index.
Chinese Stocks in the U.S.: +2.1, 418.9, 03-01-12, Bank of New York Mellon, ADR Index-China
Insight: Encouraging economic news from the U.S. helped Hong Kong open 230 points higher. The market maintained most of the gain in weak turnover. KGI Research
Quotable: “While exports and investments data pointed to a slowing economic growth in the near term, the country’s PMI remained at normal level without showing a downward trend, indicating that the magnitude of slowdown is limited and under control.” BOCOM International. 3-2-12
Chinese Company to watch: Huaneng Renewables (HNP), alternative energy. After range trading between$1.80 and $2.0 in past 3 months, share price broke through upper end of the range with huge volume yesterday.” Guoco Capital. 3-2-12
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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