As I predicted yesterday, with the important 2000 barrier of the Shanghai Composite Index coming into view, Chinese stocks generally rose today. How much this can be attributed to market fundamentals and how much down to government instruction is impossible to say: there is never any written instruction. All the same, certain patterns of behaviour can be established, recognised and therefore predicted. Stocks tend to rise in the run-up to important political sessions, or when important barriers are in risk of being breached, for instance. All major mainland corporations have a “red telephone” which connects their executives to the party leadership, and you’d better take that call when it comes if you know what’s good for you. See Richard McGregor’s book The Party for details on the hardwiring of the political apparatus into the economic landscape.
On the day, then, fifteen stocks rose, with a goodly number of them by over 1%. SAIC Motor led the pack, rising 3.59% to RMB13.86, while China Life Insurance and Ping An Insurance were not far behind, gaining 2.7% and 3.21% respectively. The suspicion that these gains are not driven by market sentiment seems confirmed when SAIC Motor‘s rise was on the same day that it announced one of the biggest recalls in history, of 1.46 million Buick and Chevrolet models due to fuel pump safety issues. Dongfeng Motor had the largest fall, declining sharply to HK$12.10 (-4.57%).
|Name||Price||Change||Mkt cap||52wk high||52wk low||EPS||P/E|
|China Construction Bank||4.14||+0.06 (1.47%)||1.04B||5.19||3.8||CN¥0.85||4.89|
|Agricultural Bank||2.46||+0.02 (0.82%)||798,994M||3.28||2.38||CN¥0.50||4.9|
|Bank of China||2.66||+0.03 (1.14%)||742,535M||3.26||2.48||CN¥0.53||5.01|
|China Mobile||80.85*||-0.10 (-0.12%)||1.63B||91.8||74.9||HK$8.17||9.89|
|Noble Group||1.06||+0.01 (1.44%)||7,025M||1.27||0.785||SGD0.04||29.23|
|China State Construction||3.13||+0.04 (1.29%)||93,900M||4.18||2.9||CN¥0.62||5.08|
|China Railway Construction||4.63||+0.05 (1.09%)||57,123M||6.49||3.95||CN¥0.84||5.5|
|China Railway Group||2.65||+0.04 (1.53%)||56,445M||3.41||2.3||CN¥0.44||6.04|
|SAIC Motor||13.86||+0.48 (3.59%)||152,814M||19||11.83||CN¥2.05||6.76|
|China Life Insurance||15.2||+0.40 (2.70%)||429,624M||22.7||12.88||CN¥0.97||15.72|
|Dongfeng Motor||12.10*||-0.58 (-4.57%)||104,255M||13.28||9.48||HK$1.37||8.82|
|China Shenhua||15.7||+0.13 (0.83%)||312,267M||25.7||15.36||CN¥2.25||6.97|
|Ping An Insurance||40.85||+1.27 (3.21%)||323,374M||53.27||31.69||CN¥3.45||11.84|
|China Telecom||3.89*||0.00 (0.00%)||314,827M||4.46||3.48||HK$0.26||15.1|
|China Communications Construction||4.03||+0.06 (1.51%)||65,184M||5.79||3.8||CN¥0.81||4.98|
|Bank of Communications||3.89||+0.04 (1.04%)||288,882M||5.68||3.65||CN¥0.84||4.62|
After the bloodbath of the past two weeks, it will come as a relief that some stocks actually showed a gain over the week. Insurers China Life and Ping An did the best, gaining 3.4% and 3.37% respectively. For the fallers, Dongfeng Motor performed the worst, declining 2.89%; Sinopec was not far behind, going down 2.61%.