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Stocks Rise on Auto Sector's Heavy Trade
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China's shares ended higher yesterday as investors bought heavily into auto firms after strong car output figures for the first four months were announced, shrugging off fears of the flu-like SARS virus, brokers said.
China's number one minivan maker Chongqing Changan Automobile was the best performer in Shenzhen with a rise of 5.1 per cent to HK$6.99 (US$0.90) in its hard currency B shares and an 8.8 per cent climb to 19.37 yuan (US$2.48) in yuan-denominated A shares.
Shanghai's hard currency B share index edged up 0.3 per cent to 115.609 points, while Shenzhen's rose 1.04 per cent to 216.20 points. B shares are open to Chinese investors and foreigners.
"Official figures indicated that the SARS disease had little impact on China's auto industry, which registered strong growth. That triggered heavy purchases," said analyst Wang Yu at Orient Securities.
The State Statistical Bureau announced this week car output more than doubled year on year to 565,400 over the first four months.
Analysts said car production was supported strongly by private purchasers, largely because people wanted to avoid public transport during an outbreak of deadly virus.
Shanghai Automotive Co rose 4.8 per cent to 13.18 yuan (US$1.59). The listed unit of Shanghai Automotive Industry Corp said April sales jumped 33 per cent on year to 46,800 units.
China-backed conglomerate Shanghai Industrial Holdings Ltd on Hong Kong Stock Exchange said yesterday it had agreed to buy a 56.63 per cent stake in Shanghai-listed bio-medicine producer Shanghai Industrial United Holdings Co for 866 million yuan (US$104.6 million) in cash.
The yuan-denominated Shanghai A share index rose 0.83 per cent to 1,619.085 points while its counterpart in Shenzhen gained 0.68 per cent to 451.57.
But analysts said some cautious investors awaited economic data for May, adopting a wait-and-see attitude to gauge the extent of a hit to economic growth from the spread of SARS.
"Some punters unloaded tourism-related counters as they believe such firms can't escape SARS," said Huatai Securities analyst Chen Huiqing.
Huangshan Tour was the third biggest B share decliner in Shenzhen with a 0.94 fall to US$0.528.
The benchmark Shanghai composite index, covering A and B shares, rose 0.82 per cent to 1,546.113 points, while Shenzhen Composite Index closed at 3431.02, up 1.09 per cent.
China's yuan closed two ticks higher against the US dollar at 8.2768 yesterday with the currency moving in a very narrow range, dealers said.
The yuan hit an intraday high of 8.2769.
Dealers said the Chinese currency was likely to stay on the firm side of a tiny range of 8.2760 to 8.2800 set by the central People's Bank of China due to the country's trade surplus, which was just US$100 million in the first four months of this year.
China has earned heavy trade surpluses over the past few years, placing the yuan on a solid track.
The yuan strengthened to 7.0306 to 100 Japanese yen yesterday from 7.0925 and gained against the euro to 9.6317 from 9.6976. It closed flat against the Hong Kong dollar at 1.0609.
(China Daily May 23, 2003)
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