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PetroChina Co., the nation’s largest energy producer, rose 2 percent. The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 49.8 in January, exceeding the median estimate of 49.5 in a Bloomberg survey. Financial shares advanced in Hong Kong and Shanghai, with Haitong Securities Co. and Ping An Insurance Group Co. rising more than 1 percent. Technology companies declined.
Hong Kong’s Hang Seng China Enterprises Index (HSCEI), or H-shares gauge, climbed 1.8 percent to 12,260.06 at the close. Along with data showing industrial output and retail
sales improved in December, the first reading of the economy’s momentum in January may alleviate concerns of a deeper downturn.
The data were “above the market expectation,” said Gerry Alfonso, a China equity sales and trading director at Shenyin & Wanguo Securities Co. “The market seems to continue stabilizing.”
The Shanghai Composite Index (SHCOMP) rose for a fourth day, adding 0.3 percent. The CSI 300 Index climbed 0.1 percent, while the Hang Seng Index climbed 1.2 percent. The Bloomberg China-US Equity Index rose 1.4 percent yesterday, spurred by the European Central Bank’s stimulus plan.
Volatile Week
Chinese stocks have been volatile this week, with the Shanghai gauge plunging 7.7 percent on Monday in reaction to new margin trading rules before rebounding over the subsequent four days after the securities regulator said it wasn’t trying to curb equity trading through the regulations.The manufacturing gauge recovered lost ground in January, suggesting stimulus measures have helped stabilize the world’s second-largest economy. The Flash PMI number also exceeded December’s 49.6 figure. Numbers below 50 indicate contraction.
The H-shares gauge rose 1.2 percent this week, while the Shanghai measure dropped 0.7 percent, halting a 10-week winning streak. China Pacific Insurance Group Co. led gains today in Hong Kong, rising 5.4 percent. Haitong Securities added 2.5 percent. BYD Co. advanced 3 percent.
In Shanghai, Shanghai DZH Ltd. jumped 10 percent to pace gains for conglomerates after announcing a plan to buy Xiangcai Securities Co. for 8.5 billion yuan. A gauge of financials in the CSI 300 rose 1.4 percent, the only gainer among 10 industry groups. Citic Securities Co. rallied 2.7 percent.
“Expectations are high that the PBOC will cut the reserve ratio before the holiday,” said Zhao Bingtong, Shenzhen-based trader at Guosen Securities Co. “That’s why financial shares are strong.” The Chinese New Year holiday starts Feb. 18 and lasts for a week.
Temporary Peak
A measure of technology stocks slid 2.6 percent for the biggest loss among 10 industry groups. Yonyou Software Co. plunged 6.4 percent.The Shanghai gauge has gained 64 percent over the past year, making it the best performer among 93 global indexes tracked by Bloomberg. The index is valued at 12.8 times 12-month projected earnings, compared with a multiple of 8.2 for the H-shares gaug
Trading volumes in the Shanghai Composite were 12 percent below the 30-day average for this time of day, according to data compiled by Bloomberg. The gauge’s 30-day volatility reached a five-year high this week.
The Shanghai index’s rally has reached a temporary peak amid signs of slowing economic growth and regulatory efforts to curb margin trading, Jian Yi, a Beijing-based partner at Windsor Capital, said in a phone interview yesterday. Stocks will regain momentum later this year as a weaker property market spurs investors to shift money from real estate into equities, he said.
Fund Probe
“The market will fluctuate in the first half,” said Jian, whose fund has returned 29 percent in the past six months, ranking ninth out of 210 mainland Chinese hedge funds tracked by Shanghai-based fund researcher Howbuy. “Financial and other blue-chip stocks that have much exposure to margin trading may underperform the benchmark. Investors should reduce holdings of these stocks.”China’s securities regulator plans to punish four fund-management firms for insider trading, according to people familiar with the matter.
China Asset Management Co., the nation’s third-largest fund manager, will be banned from issuing new products for six months, while Harvest Fund Management Co., China Universal Asset Management Co. and HFT Investment Management Co. will be barred for three months, said the people, who asked not to be identified before a public announcement by the China Securities Regulatory Commission.
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