Zhang Guangdi has watched the
market value of his Shanghai International Port Group Co. (600018) shares
jump 130 percent since Aug. 22, when China’s commerce ministry
said the government approved a free-trade zone in Shanghai.
The 67-year-old retiree says he’ll probably sell the 2,935
yuan ($480) stake when the zone, part of Premier Li Keqiang’s
plan to liberalize yuan trading and relax government regulation,
opens at the end of this month. The port operator is valued at
25 times profit, a 121 percent premium versus the Shanghai
Composite Index (SHCOMP), according to data compiled by Bloomberg.
“The stock isn’t cheap,” Zhang said as he monitored price
moves with about 50 other traders at a Shanghai Securities Co.
outlet in the city’s financial district on Sept. 12.
Shares with the word Shanghai in their names, including
those linked to the free-trade zone, led gains in Chinese
equities since Aug. 22 amid record volumes. The companies have
added $45 billion of market value, more than Vietnam’s entire
stock market, in a 27 percent rally that’s almost five times
bigger than the 5.7 percent gain for the benchmark index.
Shanghai Dragon Corp. (600630), a maker of underwear and suits, and
Shanghai Haibo Co., a taxi company, jumped at least 28 percent.
While Barclays Plc predicts the free-trade zone will help
turn Shanghai into a global hub for finance and shipping, Bank
Julius Baer Co. says the rally is unjustified because the
government hasn’t announced details and any boost to profits may
take years to materialize. The surge spurred at least five
companies, including Shanghai Port and Shanghai Zhenhua Heavy
Industries Co. (900947), to tell the exchange they had no explanation for
the gains.
Bubble Warning
Andy Xie, the former World Bank economist who warned of a
bubble in Chinese stocks in 2007 before the Shanghai Composite
plunged a record 65 percent the following year, says the rally
in free-trade stocks is another speculative mania.
“These concept stocks are of course a bubble,” Xie, one
of the 50 most influential people in global finance according to
this year’s ranking by Bloomberg Markets magazine, said in a
phone interview from Hong Kong on Sept. 12. “The free-trade
zone will take a long time to develop and earnings will show
only years down the road.”
Gains in companies linked to the free-trade zone have
fueled the benchmark index’s rebound from a four-year low in
June as economic data showed better-than-anticipated growth in
exports, industrial production and retail sales. The measure has
dropped 29 percent during the past four years, erasing about
$160 billion of market value, as the nation’s economic expansion
slowed to 7.5 percent from as much as 11.9 percent in the first
quarter of 2010.
Opening Ceremony
Premier Li is trying to transform China, where per-capita
incomes are 88 percent lower than in the U.S., into a services-led economy from an exporter reliant on a managed currency.
Shanghai is a “pilot area” for China’s economic reforms, Li
said during a research tour of the city in March, according to
state-run China.org.cn.
An opening ceremony for the 29-square kilometer (18-square
mile) free-trade area will probably take place at the end of
this month and will be officiated by Li, two people with
knowledge of the matter said last week. The zone is located in
the eastern side of the Pudong New Area along the Yangtze River.
While a draft plan seen by Bloomberg News shows the free-trade zone may liberalize 19 industries from banking to shipping
and allow freer convertibility of the yuan, the government
hasn’t published details of what the area will offer or how long
it may take for the policies to be implemented.
Double Happiness
“We are not recommending stocks on the free-trade zone
because we are not sure what kind of benefits they will get,”
Kelvin Wong, an analyst at Bank Julius Baer, which manages about
$325 billion, said by phone from Hong Kong on Sept. 11.
While equities linked to the free-trade zone may face a
“correction,” they will probably rally for several years
before large investors dump the shares, said Zhu Yaomin, a 57-year-old retiree who’s been investing in shares for two decades.
“I am not worried that these stocks have bubbles,” said
Zhu, puffing on a Double Happiness-brand cigarette and wearing
plastic slippers in a room reserved for investors with at least
2 million yuan of assets at an outlet of Changjiang Securities
Co. in eastern Shanghai. “It’s not exaggerating to say that
such an investment theme can carry on for, say, three years.”
Biggest Gains
Shanghai’s free-trade zone may compete with similar areas
in Tianjin, a port city southeast of Beijing, and China’s
southern Guangdong province, which is studying a plan to set up
a regional free-trade zone with neighboring Hong Kong and Macau.
“At the end of the day, it’s more like the left hand
giving to the right hand,” Arthur Kwong, the head of Asia
Pacific equities at BNP Paribas Investment Partners, which
manages about $658 billion, said in a Sept. 11 phone interview.
“There’s no new business created for the country, so it’s
grabbing business from neighboring cities.”
The best stocks since Aug. 22 have been companies linked to
the free-trade zone, making up 19 of the top 25 performers on
the Shanghai Composite, according to data compiled by Bloomberg.
Twelve of those companies had record trading volumes during the
past 10 days.
Shanghai Port was the biggest contributor to gains in the
benchmark index since Aug. 22, even as the company said in a
Sept. 5 statement it can’t quantify the impact of the free-trade
zone on earnings. The rally lifted its market value to $24.2
billion, almost twice that of Dubai-based DP World Ltd., which
operates more than 65 terminals in six continents. Carol Gu, a
press official at the Shanghai port, declined to comment.
Volumes Surge
Shanghai Pudong Development Bank Co. (600000) has risen 28 percent
since Aug. 22, providing the second-largest boost to the
Shanghai measure. About $2.2 billion of the shares changed hands
on Sept. 10, the most on record and about 10 times the daily
average for the past year. Shen Si, Shanghai Pudong Bank’s board
secretary, didn’t answer four office and mobile calls.
Shanghai Dragon has surged 28 percent, sending its shares
to 71 times reported earnings, according to data compiled by
Bloomberg. Shanghai Haibo gained 54 percent. Both companies
declined to comment.
Shanghai Waigaoqiao Free Trade Zone Development Co., which
said in an exchange statement Aug. 29 that it will build
distribution centers in the Shanghai area, surged by the 10
percent daily limit for 12 straight days after a trading
suspension ended on Aug. 30.
Expo Losses
The city’s companies have rallied before on local
investment developments. Tourism and transport-related shares
surged in the months before Shanghai’s 2010 World Expo on
speculation a flood of tourists would boost earnings. The stocks
peaked two weeks before the six-month trade exhibition began.
Shanghai Jinjiang International Hotels Development Co.
tumbled 42 percent in about 10 weeks after reaching a record in
April 2010. Shanghai Haibo plunged 46 percent during the same
period after advancing 58 percent during the previous six
months.
The leaders of this year’s rally have already slipped from
their peaks. Shanghai Port dropped 15 percent from its Sept. 11
high, including a 10 percent plunge yesterday. Shanghai Pudong
Bank retreated 12 percent in the past three days.
Chinese investors “tend to be short-term oriented and
overreact to good news,” Oliver Rui, a professor of finance and
accounting at China Europe International Business School in
Shanghai, said by phone on Sept. 12. “They are buying anything
with the name Shanghai in front of it and remotely connected
with the free-trade zone. This rally has gone too far.”
To contact the Bloomberg News staff on this story:
Zhang Shidong in Shanghai at
szhang5@bloomberg.net;
Richard Frost in Hong Kong at
rfrost4@bloomberg.net;
Allen Wan in Shanghai at
awan3@bloomberg.net;
Weiyi Lim in Singapore at
wlim26@bloomberg.net
To contact the editor responsible for this story:
Michael Patterson at
mpatterson10@bloomberg.net
‘Shanghai’ in Name Adds $45 Billion in Value
Tomohiro Ohsumi/Bloomberg
Pedestrians are seen on a bridge with a ticker displaying financial data in front of the Oriental Pearl Tower in the Pudong area of Shanghai, China.
Pedestrians are seen on a bridge with a ticker displaying financial data in front of the Oriental Pearl Tower in the Pudong area of Shanghai, China. Photographer: Tomohiro Ohsumi/Bloomberg
"Shanghai" in Name Adds $45 Billion in Value Amid Bubble Concern
Không có nhận xét nào:
Đăng nhận xét