This time a strong rebound in December exports lifted China stocks. Encouraging economic news from China – especially falling inflation and rebounding economic growth – have been a mainstay of a robust rally the last four months.
On Thursday the Hang Seng Index rose 0.6% to 23,354 in strong turnover, within shouting distance of the 22-month high of 23,399 set a week ago. The index of Chinese companies increased 1.0% to 11,931.
The market has slid sideways since hitting a peak last Thursday, but recent impressive gains by big-cap stocks shows there’s still plenty of upward momentum, said Peter So, managing director and co-head of research at CCB International. He told Equities he thinks the Hang Seng will reach the next resistance level of 23,700 this month.
Financial stocks and properties are leading the way, according to So. “Concept” plays like cement makers and infrastructure companies are also hot. So likes property firm Hopson (754, HK) and cement producer CNBM (CBUMY). End
Hong Kong Blue Chips: +136, +0.6%, to 23,354, 1-10-13, Hang Seng Index
Chinese Stocks in Hong Kong: +114, +1.0%, to 11,931, 1-10-13, HSCE Index
Shanghai Stocks: +8, +0.4% to 2,284, 1-10-13, Shanghai Composite Index.
Chinese Stocks in the U.S.: +4.2, 406.2, 1-9-13, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong blue chips opened 21 points higher and expanded gains when Chinese December export figures came out higher than expected. Good export numbers buoyed shipping plays: China Shipping (CSDXY) +6%. Research
Quotable: "We see limited upside for the benchmark index and expect fundamentally sound second-liners to outperform the market in near term." Guoco Capital. 1-10-13
Chinese Company to Watch: Lai Sun Development (488, HK) "Traded at 59% discount to NAV with a low debt to-equity ratio of 7% as at 31 July 2012, LSD is undervalued compared to peers." Guoco Capital. 1-10-13
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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
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