China Stock Watch 21/1/14

After yesterday’s pessimism over the spiking interbank rate and worries over trust product defaults, stocks rebounded upon a RMB2255bn liquidity injection from the PBOC. Cash shortages were partly down to the run-up to Chinese New Year, although evidently the influence of funds from Alibaba and Ping An Insurance, for example, which offer substantially over the bank rate, is helping dry up bank deposits. The expectation is that with the PBOC sitting on massive FX reserves, it will be able to smooth over the bumps as banks have less deposits, SOEs have less access to capital (and hence are issuing more overseas bonds), and as the trust products and the shadow banking industry fail to provide the promised dividends. Time will tell, but the basic system of the Chinese economy is undergoing a rapture, and chances are there will be victims. Stocks trading around or even below book value is an almighty red flag.

On today’s trading, then, railway stocks did best, with China Railway Group gaining 2.19% to RMB4.2 a share, and China Railway Construction adding 1.68% to close at RMB2.42. Twelve of the twenty major stocks closed up, though only the aforementioned pair, SAIC Motor and Ping An Insurance put on over 1%. CNOOC had a very bad day, going down 6.3% to HK$13.08 on news that it had failed to meet production targets for the third year running. Energy stocks were otherwise flat, with China’s slower growth believed to herald lower growth in energy usage; both Sinopec and PetroChina finished the day as they started.

The Shanghai Composite closed at 2,008.31, having gained 17.06 points, or 0.86%.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.62 0.00 (0.00%) 538,531.74M 7.03 4.05 CN¥0.62 7.51
PetroChina 7.63 0.00 (0.00%) 1.40B 9.5 7.08 CN¥0.68 11.29
ICBC 3.4 0.00 (0.00%) 1.19B 4.53 3.38 CN¥0.74 4.62
China Construction Bank 3.92 +0.02 (0.51%) 980,043.05M 5.19 3.8 CN¥0.85 4.63
Agricultural Bank 2.37 +0.01 (0.42%) 769,762.02M 3.28 2.35 CN¥0.50 4.72
Bank of China 2.47 0.00 (0.00%) 690,030.45M 3.26 2.45 CN¥0.53 4.65
China Mobile 77.15* +0.50 (0.65%) 1.55B 89.2 74.9 HK$8.19 9.41
Noble Group 1 -0.01 (-0.99%) 6,660.21M 1.27 0.785 SGD0.04 27.64
China State Construction 3 +0.02 (0.67%) 90,000.00M 4.18 2.9 CN¥0.62 4.87
CNOOC 13.08* -0.88 (-6.30%) 583,988.72M 16.52 12.04 HK$1.89 6.91
China Railway Construction 4.2 +0.09 (2.19%) 51,817.67M 6.25 3.95 CN¥0.84 4.99
China Railway Group 2.42 +0.04 (1.68%) 51,545.76M 3.36 2.3 CN¥0.44 5.52
SAIC Motor 12.68 +0.20 (1.60%) 139,804.19M 19 11.83 CN¥2.05 6.18
China Life Insurance 14.3 +0.08 (0.56%) 404,185.29M 22 12.88 CN¥0.97 14.79
Dongfeng Motor 11.52* -0.04 (-0.35%) 99,257.71M 13.28 9.48 HK$1.38 8.37
China Shenhua 14.15 +0.06 (0.43%) 281,438.12M 25.28 13.97 CN¥2.25 6.29
Ping An Insurance 41.37 +0.65 (1.60%) 327,490.79M 53.27 31.69 CN¥3.45 11.99
China Telecom 3.61* -0.01 (-0.28%) 292,165.84M 4.42 3.48 HK$0.26 13.98
China Communications Construction 3.81 +0.02 (0.53%) 61,625.74M 5.79 3.74 CN¥0.81 4.71
Bank of Communications 3.73 +0.01 (0.27%) 276,999.97M 5.68 3.65 CN¥0.84 4.43
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