Houston Community News >> Chinese Stocks End Year Up 97 Percent
12/28/2007 SHANGHAI (AP)- China’s main
stock index fell on Friday as banks and property shares slipped, but it
ended this year with a gain of 97 percent, making China one of the
world’s best-performing markets for a second straight year.
The Shanghai Composite Index dropped 0.89 percent on the day to 5,261.563 points, leaving it 14 percent below an all-time high hit in October. In 2006, the index soared 130 percent.
After a tumultuous year in which stocks swung wildly and many reached valuations several times as expensive as foreign equities, investors expect the Chinese market to rise much more slowly in 2008.
Corporate profit growth is expected to slow, perhaps to 25-30 percent next year from an estimated 50-60 percent in 2007, as monetary policy tightens further and companies make smaller profits in the stock market.
Problems in the global economy, especially the credit squeeze in the United States, may also hurt China.
But most analysts think the Chinese market has a good chance of hitting fresh record highs next year, aided by the country’s economic boom and corporate restructuring which often involves injections of assets into listed firms by their state parents.
Li wanted Air China earlier this year to buy a stake in China Eastern and although this has not happened, some investors think he may encourage more restructuring and merger activity in the industry. China Eastern shares surged 6.77 percent to 21.29 yuan.
On Jan 8, China Eastern shareholders, which include the parent of Air China, will vote on a deal by Singapore Airlines and Temasek Holdings to buy a 24 percent stake in China Eastern.
Many analysts think the deal will go ahead, but some see a chance that news of Li’s appointment could affect the voting. If the deal is not approved, airline shares could benefit from speculation about a bidding war for a stake in China Eastern.
Among other gainers, Pacific Securities 601099.SS, a small securities firm, had a dramatic debut in Shanghai, soaring 424 percent to 41.92 yuan.
The Shanghai Composite Index dropped 0.89 percent on the day to 5,261.563 points, leaving it 14 percent below an all-time high hit in October. In 2006, the index soared 130 percent.
After a tumultuous year in which stocks swung wildly and many reached valuations several times as expensive as foreign equities, investors expect the Chinese market to rise much more slowly in 2008.
Corporate profit growth is expected to slow, perhaps to 25-30 percent next year from an estimated 50-60 percent in 2007, as monetary policy tightens further and companies make smaller profits in the stock market.
Problems in the global economy, especially the credit squeeze in the United States, may also hurt China.
But most analysts think the Chinese market has a good chance of hitting fresh record highs next year, aided by the country’s economic boom and corporate restructuring which often involves injections of assets into listed firms by their state parents.
Li wanted Air China earlier this year to buy a stake in China Eastern and although this has not happened, some investors think he may encourage more restructuring and merger activity in the industry. China Eastern shares surged 6.77 percent to 21.29 yuan.
On Jan 8, China Eastern shareholders, which include the parent of Air China, will vote on a deal by Singapore Airlines and Temasek Holdings to buy a 24 percent stake in China Eastern.
Many analysts think the deal will go ahead, but some see a chance that news of Li’s appointment could affect the voting. If the deal is not approved, airline shares could benefit from speculation about a bidding war for a stake in China Eastern.
Among other gainers, Pacific Securities 601099.SS, a small securities firm, had a dramatic debut in Shanghai, soaring 424 percent to 41.92 yuan.
(Contributed by AP)