| Financial Times | - |
Monday
03:00 GMT. Most Asia-Pacific equities shrugged off jitters in the
Chinese interbank market to echo gains in US markets on Friday, but
stocks in Japan were kept in check by a rise in the yen against the US
dollar.
China’s Stocks Halt Nine-Day Losing Streak as Banks Lead Rebound
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China Construction Bank Corp. and China Citic Bank Corp. rebounded at least 5 percent after plunging in late trade on Dec. 20. The Shanghai Stock Exchange said “abnormal trading” was caused by foreign institutional investors adjusting their positions to track index changes. Guizhou Bailing Group Pharmaceutical Co. led gains among drug stocks on expectations the outbreak of avian influenza will boost medical expenditures. Tianjin Zhonghuan Semiconductor Co. tumbled 10 percent.
The Shanghai Composite Index (SHCOMP) rose 0.6 percent to 2,097.93 as of 10:43 a.m. It trades at 8.1 times projected profit for the next 12 months, the lowest level since July 31. The 14-day relative strength measure, measuring how rapidly prices have advanced or dropped during a specified time period, was at 27.4 on Dec. 20. Readings below 30 indicate it may be poised to rise.
“A rebound is imminent as valuations and technical indicators are at pretty low levels,” said Wu Kan, a money manager at Dragon Life, which oversees about $3.3 billion. “The focus is still on money-market rates. Unless they retreat from the current high levels, the rebound may be short-lived.”
The seven-day repurchase rate, a gauge of liquidity in the financial system, jumped 100 basis points on Dec. 20 to 7.60 percent in Shanghai, capping a weekly gain of 328 basis points, according to fixings by the National Interbank Funding Center. That’s the highest level since June’s funding squeeze drove the rate to a record 10.77 percent.
The first five seven-day repo transactions reported today had rates ranging from 5.57 percent to 9.80 percent, with a weighted average of 8.47 percent.
The CSI 300 Index gained 0.6 percent to 2,291.60 today. The Hang Seng China Enterprises Index (HSCEI) added 0.8 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, fell 0.2 percent in New York on Dec. 20.
--Zhang Shidong. Editor: Allen Wan
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net
To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net
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