[20081117]ChinaAfternoonCommentary20081114-Shanghai Securities

Market Keeps Rising
 
Shanghai10th November11th November12th November13th November14th November
A share index1969.44
7.27%1936.72
-1.66%1952.98
0.84%2024.90
3.68%2086.68
3.05%
B share index100.08
9.06%97.66
-2.42%98.96
1.32%103.22
4.30%106.45
3.13%
Treasury Bond index119.22
0.06%119.39
0.14%119.63
0.20%119.74
0.09%119.79
0.04%
Composite index1874.80
7.27%1843.61
-1.66%1859.11
0.84%1927.61
3.68%1986.44
3.05%
Trading VolumeRMB58.943bil
107.351mil shsRMB58.380bil
103.060mil shsRMB42.270bil
75.259mil shsRMB80.396bil
137.424mil shsRMB90.231bil
147.963mil shs

 
Shenzhen10th November11th November12th November13th November14th November
A share index6525.38
6.50%6496.25
-0.45%6514.25
0.28%6777.69
4.04%7093.33
4.66%
B share index1906.95
5.60%1881.81
-1.32%1892.47
0.57%1916.11
1.25%1939.00
1.19%
Component index6127.12
6.50%6099.77
-0.45%6116.67
0.28%6364.03
4.04%6660.41
4.66%
Trading VolumeRMB22.207bil
45.995mil shsRMB26.786bil
49.765mil shsRMB19.697bil
36.853mil shsRMB35.217bil
63.722mil shsRMB40.557bil
72.980mil shs

 
Profile of Today’s Market:
China securities market on Friday continued rising and real estate stocks rated high in the rising range. Textile stocks performed stable in the whole day. Non-ferrous sector rose rapidly in the afternoon. All gold stocks rose to limit. The surrounding markets today also rose except for Korea. Nikkei 225 Index rose by 2.76% and Hang Seng Index rose by 3.45%. Singapore and Indonesia stock markets rose by over 1%. In the capital, the aggregated financial products of funds and securities companies recently enter into the phase to approve and issue collectively. These products in 08Q4 may bring about 40.56 billion Yuan to the market.
 
Key Drivers:
The real estate stocks surge today. Three property stocks close at upper limit and China Vanke jumps by over 4%. Qi Ji, the vice minister of Ministry of Housing and Urban-Rural Development, told media about the three-year 900-billion-Yuan investment plan of housing security. The annual 300-billion-Yuan scale equals 12% of the real accomplished investment amount of national real estate industry in 2007 that is 2.5 trillion Yuan, or 2.6% of total fixed assets investment amount throughout the country. For the upstream and downstream industries, such as iron & steel and cement, this plan will directly create new demand. It is not only the practice of civil lives improvement policies determined by the 17th National Congress of the CPC, but also a fiscal measure to promote economy growth.
 
Textile stocks performed stably with Huafang Textile advancing over 6%. Wen Jiabao, premier of the State Council presided the standing meeting of the State Council on Nov 5 to implement active fiscal polices and moderately loose monetary policy. The ten measures released at the meeting were not aimed at textile industry directly. However with all policies and investment carried out, the domestic demand will be boosted, which will have some support on textile product demand essentially. Data released by General Administration of Customs showed the export amount of textile and garments was 153.717 billion USD in China in the first ten months of the year, up by 5.89% y-o-y. Professional considered the export growth of textile industry created 6-year low in the first 10 months, which will lead the value-added tax reform. Hence the corporate income will be added and the tense situation of liquidity will be eased.
 
Non-ferrous metal sector soared quickly in afternoon session among which gold stocks rose to daily limit. All the sectors increased today. The price of LME futures copper rebounded from the 3-years bottom on Thursday. The sluggish USD and the productivity reduction in China counteracted the worries of market demand. The early data showed that China manufacturing production declined in Oct.