By Chua Kong Ho
Oct. 27 (Bloomberg) -- China's stocks fell, sending the CSI 300 Index to its biggest loss in four months, on concern corporate profits will weaken further as the economy slows.
Aluminum Corp. of China Ltd., the nation's largest maker of the metal, fell by the daily 10 percent limit after third- quarter profit slumped with waning demand. Datang International Power Generation Co., a Beijing-based power producer, dropped 10 percent after posting a third-quarter loss. China Construction Bank Corp. lost 5.1 percent as profit growth weakened.
``Earnings growth will slow further due to overcapacity caused by the slowing international economy,'' said Philippe Zhang, Shanghai-based chief investment officer at AXA SA's China fund management joint venture, which oversees about $150 million. He declined to say whether he was buying or selling stocks, citing regulatory restrictions.
The CSI 300 Index, which tracks yuan-denominated shares traded in Shanghai and Shenzhen, fell 126.93, or 7.1 percent, to 1,654.67 at the close, the steepest decline since June 19 and the lowest close since Nov. 28, 2006. Only 5 of the 300 stocks on the index advanced, with financial shares contributing the most to the decline.
The index extended its loss this year to 69 percent, the worst performer in Asia, on concern a global recession will reduce demand for the nation's goods. China's economy grew 9 percent in the third quarter from a year earlier, the slowest pace in five years.
Third-quarter profits declined an average 17 percent from the prior three months, Shanghai Securities News reported, citing figures from the 645 companies that have reported earnings as of Oct. 26.
Profit Slowdown
Aluminum Corp., also known as Chalco, dropped 10 percent to 5.91 yuan. Third-quarter earnings slumped 93 percent to 182.9 million yuan ($27 million) from a year earlier, as metal prices fell and slowing economic growth reduced demand.
Datang fell 10 percent to 5.25 yuan, the lowest close since Feb. 7, 2007. The company had a third-quarter loss of 432.9 million yuan, it said, without providing year-earlier figures.
China Construction Bank declined 5.1 percent to 3.69 yuan. Third-quarter profit rose 12 percent to 25.6 billion yuan, slower than the 71 percent in the first half. The bank said it made 9.3 billion yuan of provisions on overseas investments, including mortgage-backed securities and debt issued by failed Lehman Brothers Holdings Inc.
Industrial & Commercial Bank of China Ltd. said profit rose 26 percent in the third quarter to 28.2 billion yuan, growing at less than half the pace of the first six months. Its shares were suspended from trading today due to a shareholders meeting.
Bank Profits
Bank of Communications Co. dropped 9.5 percent to 4.17 yuan, while Shanghai Pudong Development Bank Co. fell 9.3 percent to 11.01 yuan.
The Shanghai Composite Index, a measure of shares on the larger of China's two stock exchanges, lost 6.3 percent to 1,723.35. The Shenzhen Composite Index dropped 6.5 percent to 472.99.
The following shares also rose or fell in China. Stock symbols are in parentheses after company names:
Coal mining stocks: Power-station coal prices at Australia's Newcastle port, a benchmark for Asia, dropped 8.3 percent to $96 a metric ton in the week ended Oct. 24, according to the globalCOAL NEWCIndex. That was the first fall for the index below $100 a ton since Jan. 25.
Shanxi Guoyang New Energy Co. (600348 CH), based in Shanxi province, declined 1 yuan, or 10 percent, to 9.02. China Shenhua Energy Co. (601088 CH), the country's biggest coal producer, dropped 1.91 yuan, or 10 percent, to 17.15. Pingdingshan Tianan Coal Mining Co. (601666 CH), which operates mines in China's Henan province, fell 1.25 yuan, or 10 percent, to 11.22.
Beijing Hualian Hypermarket Co. (600361 CH), an operator of supermarkets and department stores, fell 0.76 yuan, or 10 percent, to 6.80, after saying third-quarter profit slumped 90 percent to 3.4 million yuan.
China Pacific Insurance (Group) Co. (601601 CH), the nation's third-largest insurer, fell 0.99 yuan, or 8 percent, to 11.35, after posting a third-quarter loss of 1.64 billion yuan, compared with net income of 1.93 billion yuan a year earlier.
Jiangxi Copper Co. (600362 CH), China's second-biggest smelter of the metal, dropped 1 yuan, or 10 percent, to 9.01. Wu Jimeng, assistant to the general manager, said today in an interview that smelting capacity at the company will expand by 29 percent this year. Copper tumbled by the 4 percent daily limit in Shanghai to 32,540 yuan a ton.
Panzhihua New Steel & Vanadium Co. (000629 CH), southwestern China's biggest steelmaker, gained 0.83 yuan, or 10 percent, to 9.15. The company's plan to offer as much as 7.2 billion yuan in stock to buy Chongqing Titanium Industry Co., Sichuan Changcheng Special Steel Co. and other assets was given conditional approval by the securities regulator.
To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net
Posts
No comments:
Post a Comment