China Stock Watch 10/1/14

Sorry there’s no business briefs today. I am in London and time is tight. I will be in Beijing next week for the first time in some months, and am very much looking forward to it.

Today was mixed, but something of an improvement for major Chinese stocks, with eight rising and only seven falling (unusually, five were flat on the day). Gains were however tentative, with none breaching 1% – China Telecom was the best performer on the day, up 0.82%. It is perhaps no coincidence that China Telecom has won awards for its investor relations, reflecting a commitment to transparency. Elsewhere, rail stocks were worst performers, with China Railway Group and China Railway Construction down 2.46% and 2.83% respectively. China Railway Group has not been forthcoming since the death of chairman Bai Zhongren, and the suspicions of unmanageable debts and who-knows-what problems have dragged down China Railway Construction, too.

The Shanghai Composite Index slumped to 2,013.30, down 14.32 points or 0.71%. My predictions of a buy-back led rise have not come about. The big SOEs could be finding themselves between a rock and a hard place, ordered to deleverage, revenue streams not kicking in as forecast (projections of likely returns always being likely to be grossly optimistic) and now being “advised” to buy-back shares to increase prices. One almost feels sorry for them.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.42 +0.02 (0.45%) 515,218.70M 7.03 4.05 CN¥0.62 7.19
PetroChina 7.53 -0.06 (-0.79%) 1.38B 9.5 7.08 CN¥0.68 11.14
ICBC 3.53 0.00 (0.00%) 1.24B 4.53 3.4 CN¥0.74 4.8
China Construction Bank 3.96 +0.01 (0.25%) 990,043.48M 5.19 3.8 CN¥0.85 4.68
Agricultural Bank 2.41 0.00 (0.00%) 782,753.85M 3.28 2.38 CN¥0.50 4.8
Bank of China 2.51 +0.01 (0.40%) 701,205.02M 3.26 2.48 CN¥0.53 4.73
China Mobile 77.85* +0.50 (0.65%) 1.56B 91.1 74.9 HK$8.20 9.49
Noble Group 1.03 0.00 (0.00%) 6,859.03M 1.27 0.785 SGD0.04 28.47
China State Construction 2.97 -0.04 (-1.33%) 89,100.00M 4.18 2.9 CN¥0.62 4.82
CNOOC 13.74* -0.14 (-1.01%) 613,456.04M 16.76 12.04 HK$1.89 7.25
China Railway Construction 4.12 -0.12 (-2.83%) 50,830.67M 6.46 3.95 CN¥0.84 4.89
China Railway Group 2.38 -0.06 (-2.46%) 50,693.76M 3.41 2.3 CN¥0.44 5.43
SAIC Motor 13.07 +0.01 (0.08%) 144,104.15M 19 11.83 CN¥2.05 6.37
China Life Insurance 14.31 0.00 (0.00%) 404,467.94M 22 12.88 CN¥0.97 14.8
Dongfeng Motor 11.24* -0.20 (-1.75%) 96,845.19M 13.28 9.48 HK$1.38 8.16
China Shenhua 14.49 +0.05 (0.35%) 288,200.60M 25.33 14.4 CN¥2.25 6.44
Ping An Insurance 39.58 -0.39 (-0.98%) 313,320.92M 53.27 31.69 CN¥3.45 11.48
China Telecom 3.69* +0.03 (0.82%) 298,640.44M 4.42 3.48 HK$0.26 14.28
China Communications Construction 3.84 0.00 (0.00%) 62,110.98M 5.79 3.8 CN¥0.81 4.74
Bank of Communications 3.8 +0.01 (0.26%) 282,198.36M 5.68 3.65 CN¥0.84 4.51

Week’s Movers

Movement over the week shows how disappointing the major stocks have been so far this year.

Bank of Communications rose 1.06%, SAIC Motor rose 0.08%, and Noble Group was flat. The other seventeen stocks fell over the week, with China Railway Group not surprisingly leading the way, falling 5.18%, while China Railway Construction was not far off, going down 4.63%. It’s been a very poor start to the year. Perhaps 2014 will surprise us and see some solid share performance, but with reforms challenging the privileges of SEOs and lower growth practically assured, companies will have to show some real innovation and agility. It remains to be seen if they as institutions have it in them.

risersfallers

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