The recent “cash crunch” does not reflect well in China’s economic management. While the aim of restricting risky lending is laudable, the pursuit of this has been typically ham-fisted. As Aaron Back wrote in the WSJ:
The PBOC seems to have misjudged the potential for market strain, both in June and now. Communications have been erratic, with total silence from the central bank as concerns built last week. This was followed on Thursday by a post on the fashionable social media service Weibo announcing the injections, an abrupt change in messaging style from the secretive central bank.
Some day Chinese institutions will find that transparency, timely disclosure and good communications are helpful in managing expectations, handling markets, and reassuring investors: in other words, in maintaining share price. The companies take their lead from the top of course: if government is dreadful at communicating, it’s little wonder Chinese businesses follow suit. China Telecom‘s recent award for “Best Overall Investor Relations” show that there is an appetite for greater transparency, but this will likely only be replicated if it helps the bottom line. There’s a large cultural change needed, and government needs to help promote best practice.
On the day, major stocks had a modest day, with gains seen in telecoms and insurance, while banks (partly from “portfolio adjustment”) and construction fell. The biggest gains were posted by China Telecom (up 2.09% to RMB3.90) and Dongfeng Motor (up 1.61% to HK$12.66). Eight stocks saw a decline on the day, with Sinopec seeing the largest fall, drifting 1.3% to RMB 4.55. None of the other seven fell by over 1%.
The Shanghai Composite Index closed at 2,092.91, up 3.20 points (+0.15%).
I am making Xmas dinner tomorrow, and will be having a go at making beef wellington, instead of the usual turkey. If it comes out alright, I’ll post a picture.
|Name||Price||Change||Mkt cap||52wk high||52wk low||EPS||P/E|
|China Construction Bank||4.14||-0.03 (-0.72%)||1.04B||5.19||3.8||CN¥0.85||4.89|
|Agricultural Bank||2.46||-0.01 (-0.40%)||798,994M||3.28||2.38||CN¥0.50||4.9|
|Bank of China||2.65||-0.01 (-0.38%)||739,744M||3.26||2.48||CN¥0.53||4.99|
|China Mobile||80.95*||+0.40 (0.50%)||1.63B||91.8||74.9||HK$8.17||9.91|
|Noble Group||1.04||+0.01 (0.97%)||6,892M||1.27||0.785||SGD0.04||28.73|
|China State Construction||3.18||0.00 (0.00%)||95,400M||4.18||2.9||CN¥0.62||5.16|
|China Railway Construction||4.67||-0.04 (-0.85%)||57,616M||6.49||3.95||CN¥0.84||5.55|
|China Railway Group||2.69||-0.01 (-0.37%)||57,297M||3.41||2.3||CN¥0.44||6.14|
|SAIC Motor||13.79||-0.01 (-0.07%)||152,043M||19||11.83||CN¥2.05||6.72|
|China Life Insurance||14.75||+0.05 (0.34%)||416,904M||22.7||12.88||CN¥0.97||15.26|
|Dongfeng Motor||12.66*||+0.20 (1.61%)||109,080M||13.28||9.48||HK$1.37||9.22|
|China Shenhua||15.81||+0.06 (0.38%)||314,455M||25.7||15.51||CN¥2.25||7.02|
|Ping An Insurance||39.88||+0.36 (0.91%)||315,696M||53.27||31.69||CN¥3.45||11.56|
|China Telecom||3.90*||+0.08 (2.09%)||315,636M||4.46||3.48||HK$0.26||15.14|
|China Communications Construction||4.05||+0.01 (0.25%)||65,508M||5.79||3.8||CN¥0.81||5|
|Bank of Communications||3.92||-0.02 (-0.51%)||291,110M||5.68||3.65||CN¥0.84||4.65|