singapore hotel: China"s Stocks Rise to Highest in Three Months as Shippers Rally

China’s stocks rose to the highest

level in almost three months, led by consumer discretionary and

industrial companies.

Cosco Shipping Co. jumped 10 percent as the Baltic Dry

Index, a benchmark of commodity shipping rates, surged for a

seventh day. SAIC Motor Corp., China’s largest carmaker, rallied

3.2 percent. A private survey showed China’s service industries

expanded last month. ZTE Corp. paced gains for phone companies

on speculation the government will issue licenses for fourth-generation mobile networks this month.

The Shanghai Composite Index (SHCOMP) gained 1.5 percent to 2,254.84

as of 10:28 a.m., poised for the highest close since Sept. 12.

The ChiNext index of small companies rallied 1.6 percent, rising

for a second day after plunging by a record on Dec. 2 amid the

government’s plan to resume initial public offerings next month.

“There’s fund flow into blue-chip big-caps from smaller

companies after the IPO resumption news,” said Wang Weijun, a

strategist at Zheshang Securities Co. in Shanghai. “Big-caps’

low valuations are attractive to investors. The market is also

expecting good policies” from this month’s Central Economic

Working Conference, where the government may release details on

its reform plans, he said.

The Shanghai index is valued at 8.7 times projected 12-month earnings, while the MSCI Emerging Markets Index has a

multiple of 10.5, according to data compiled by Bloomberg.

Trading volumes in the Shanghai measure were 43 percent above

the 30-day average for this time of day, while 100-day

volatility fell to the lowest level in a year yesterday, data

showed.

Xi Outlook

The CSI 300 Index advanced 1.3 percent to 2,473.63 today,

while the Hang Seng China Enterprises Index (HSCEI) slid 0.3 percent.

The Bloomberg China-US Equity Index of the most-traded Chinese

stocks in New York fell 0.4 percent yesterday.

The Shanghai Composite climbed 3.7 percent in November,

paring this year’s loss to 0.8 percent, after the government

announced the biggest package of policy changes since the 1990s.

“While the overall situation is good, the environment for

economic and social development next year is not

optimistic,”President Xi Jinping said at a symposium on Nov.

22, according a report from the official Xinhua News Agency

yesterday.

Xi’s comments about economic development, which echoed past

statements by party officials, may reflect efforts to tamp

expectations for growth in 2014. While industrial investment is

picking up and the Ministry of Commerce says retail sales will

rise more than 13 percent this year, China faces headwinds that

include factory overcapacity, excessive corporate debt and

slower export demand.

Services Trade

China may set its 2014 gross domestic product growth target

at 7 percent, down from 7.5 percent this year, the Economic

Information Daily said yesterday, citing research groups.

Economists estimate growth in gross domestic product will slow

to 7.5 percent next year from 7.6 percent this year, according

to the median projection in Bloomberg News surveys last month.

HSBC Holdings Plc and Markit Economics’ services Purchasing

Managers’ Index had a reading of 52.5 for last month, compared

with 52.6 in October. A number more than 50 indicates an

expansion. The official non-manufacturing PMI was 56 last month,

compared with 56.3 in October, according to a report yesterday.

To contact Bloomberg News staff for this story:

Weiyi Lim in Singapore at

wlim26@bloomberg.net;

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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