(BN) China’s Stocks Fall for First Time in Seven Days on Valuati ons +------------------------------------------------------------------------------+ China’s Stocks Fall for First Time in Seven Days on Valuations 2014-11-05 09:00:48.934 GMT By Bloomberg News Nov. 5 (Bloomberg) -- China’s stocks fell for the first time in seven days as construction and transport companies slid on concern recent gains were excessive and after a private report showed expansion in the nation’s service industry slowed. China Railway Group Ltd. slid 4.4 percent and China Cosco Holdings Co. slumped 4.9 percent after they both surged more than 20 percent in the past two weeks. Sany Heavy Industry Co. halted a seven-day rally, falling 2.4 percent. PICC Property & Casualty Co. led a decline for insurers in Hong Kong after announcing a rights offer. Shaanxi Heimao Coking Co. jumped 44 percent on its debut in Shanghai. The Shanghai Composite Index lost 0.5 percent to 2,419.25 at the close. China plans a $16.3 billion fund to finance construction of infrastructure linking its markets to three continents as President Xi Jinping pushes forward with his plans to revive the centuries-old Silk Road trading route. “These infrastructure-related stocks have accumulated massive gains and they need to take a breather here,” Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai, said by phone today. “The run-up in these stocks is more like short-term speculation as the market isn’t too sure about how much overseas investment can contribute to their earnings.” Hong Kong’s Hang Seng China Enterprises Index dropped 1 percent to 10,622. The CSI 300 Index slid 0.4 percent. The Hang Seng Index retreated 0.6 percent. The Bloomberg China-US Equity Index added 0.7 percent yesterday. The Shanghai Composite is valued at 8.9 times 12-month projected earnings, the highest level since June 2013, according to data compiled by Bloomberg. Trading volumes in the index were 27 percent higher than the 30-day average today. Exchange Link The Shanghai Composite gained 5.6 percent during the six- day winning streak. The measure has rallied 14 percent this year and is headed for its steepest gain since 2009 as funds flowed into equities before a planned stock link with Hong Kong. The investment industry is ready for the Shanghai-Hong Kong exchange link to start, according to the head of a trade group whose members include BlackRock Inc. and Goldman Sachs Asset Management. “Everybody is ready,” Mark Austen, the chief executive officer of the Asia Securities Industry & Financial Markets Association, said in an interview in Singapore. Authorities should give the industry at least two weeks notice before trading begins and clarify the capital gains tax liability for foreign investors, he said. Industrial Stocks A measure of industrial companies in the CSI 300 has jumped 6.8 percent in the past month, the biggest gain among 10 groups. The gauge trades at 11.7 times projected 12-month earnings, the highest level since May 2012. China Communications Construction Co. has soared 30 percent in the past month, while China Railway Group gained 38 percent. The infrastructure fund, overseen by Chinese policy banks, will be used to build and expand railways, roads and pipelines in Chinese provinces that are part of the strategy to facilitate trade over land and shipping routes, according to government officials who participated in drafting the plan. China’s services purchasing managers’ index fell to 52.9 in October from 53.5 a month earlier, HSBC Holdings Plc and Markit Economics said today. A reading above 50 indicates expansion. Data this week showed the government’s non-manufacturing PMI fell to 53.8 last month from 54 in September. Power Reform PICC, China’s biggest non-life insurer, slumped 2.5 percent for the biggest drop since Sept. 30. The company said it plans to raise 7.25 billion yuan ($1.2 billion) in a rights offer of 0.9 shares for every 10 in Hong Kong and China to replenish capital. People’s Insurance Company (Group) of China Ltd. lost 1.8 percent. Shenzhen Energy Group Co. surged by the 10 percent daily limit. Guangdong Electric Power Development Co. added 2 percent, closing at the highest level since April 2013. A gauge of utilities in the CSI 300 rose 0.7 percent for the biggest gain among 10 industry groups. The nation will test power- transmission price reform in Shenzhen, the National Development and Reform Commission said in a statement on its Website. The trial will change the current model for grid companies to make money.
Posted on: Wed, 05 Nov 2014 11:16:20 +0000
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