China Stocks Languish During Mainland Holiday

Gene Linn |

China stocks continued to languish Thursday during the during the Mainland’s long Golden Week holiday, but investors are poised to make moves after trading in Shanghai and Shenzhen resumes next Monday.

Hong Kong’s Hang Seng Index barely moved in tepid turnover, rising 0.1% to 20,908. The index of Chinese companies rose 0.2% to 9,849.

There’s a feeling among analysts that Mainland markets might break out of their prolonged downturn now that a date has been set to announce a new group of national leaders. A sustained rise in China’s A-shares could be a trigger for a rally in China stocks sold outside the Mainland.

“Investors will (keep an) eye on whether government will speed up its stimulus measures after the confirmation of the 18th National Congress of the Communist Party starting on 8 Nov,” said Ben Kwong, chief operating officer at KGI Asia.
A major development this week will be the release of U.S. employment data Friday, which will give an indication of the pace of the U.S. economic recovery.

In the short term, the uncertain macro-economic environment seems to be pushing funds into utilities in search of stable earnings, Kwong told Equities in an email. Utilities may continue to gain in the near term, he said, even though the dividend yield for most of them has fallen below 4%. End

DAILY FIX

Hong Kong Blue Chips: +20, +0.1%, to 20,908, 10-4-12, Hang Seng Index

Chinese Stocks in Hong Kong: +20, +0.1%, to 9,849, 10-4-12, HSCE Index

Shanghai Stocks: +30, +1.4% to 2,086, 9-28-12, Shanghai Composite Index. Closed for a holiday.

Chinese Stocks in the U.S.: -1.7, 377.8, 10-3-12, Bank of New York Mellon, ADR Index-China

Insight: Hong Kong blue chips opened 20 points higher and consolidated at 20,900 in thin trading. Major sports plays, such as Xtep (XTEPY), rose between 8% and 10%. Chinese financials were mixed. China Life (LFC) gained 1%. KGI Research

Quotable: "Focus on the consumption players." BOCOM International. 10-4-12

Chinese Company to Watch: "Going forward, CTIH (CTIHY) will continue to benefit from the buoyant growth of China’s reinsurance market." BOCOM International. 10-3-12

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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