End to China Stocks Consolidation May Be Near -- Analyst

Gene Linn  |

China stocks continued their slow-motion consolidation Wednesday awaiting the Chinese GDP figure on Friday and more announcements by the new Chinese leadership about stimulus and reform measures.

The Hang Seng Index in China gateway Hong Kong slid 0.1% to 23,357 in slightly reduced turnover. The index of Chinese companies dropped 0.8% to 11,908.

The Hang Seng has moved sideways since a sharp rise January 2 and investors were still taking profits Wednesday, said Francis Lun, managing director at Lyncean Securities. He told Equities the market shrugged off a speech by Hong Kong Chief Executive C. Y. Leung about measures to cool off the overheated local property market.

But stocks could break out of the doldrums by next week, Lun said. Release of major Chinese economic figures on Friday, including GDP, may help restart the rally.

“There may be some economic news or assurance by Chinese authorities about improving economic growth,” Lun said.

Financials will lead the way if the market begins rising again, he said. Lun likes insurer PICC (PPCCY) because it was listed recently and investors are still trying to push the price higher. End


Hong Kong Blue Chips: -25, -0.1%, to 23,357, 1-16-13, Hang Seng Index

Chinese Stocks in Hong Kong: -99, -0.8%, to 11,908, 1-16-13, HSCE Index

Shanghai Stocks: -16, -0.7% to 2,310, 1-16-13, Shanghai Composite Index.

Chinese Stocks in the U.S.: 2.9, 408.7, 1-15-13, Bank of New York Mellon, ADR Index-China

Insight: Hong Kong retreated in the face of weakness in major Asian and Mainland A-share markets. China Mobile (CHL) fell 1.5% after announcing a cautious target for 2013. KGI Research

Quotable: "All eyes will be on Chinese economic data due on Friday." BOCOM International. 1-16-13

Chinese Company to Watch: "December auto sales beat expectation with a pick-up in demand and inventory drawdown. We believe China’s auto industry bottomed out in 3Q12, and will recover further in 2013. Our top picks are Zhengtong (CZASY), Geely (GELYY) and Dongfeng (DNFGY)." UOB Kay Hian. 1-15-13

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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