China Stocks Advance to Four-Week High, Led by China Petroleum

By Zhang Shidong

March 18 (Bloomberg) -- China’s stocks rose to the highest in almost four weeks, led by energy and copper stocks, on expectation that higher commodity prices will help boost profits.

PetroChina, the nation’s biggest oil and gas explorer, and China Petroleum & Chemical Corp., Asia’s biggest oil refiner, both added more than 1 percent. Jiangxi Copper Co., the country’s No. 1 producer of the metal, rose 5.7 percent after prices gained.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, gained 31.66, or 1.4 percent, to 2,249.98 as of 2:07 p.m. local time, set for the highest since Feb. 23. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, advanced 1.9 percent.

“Oil prices have been doing pretty well these day and as long as the uptrend continues, that will help to raise the profitability of energy stocks,” said Zhang Ling, a fund manager at ICBC Credit Suisse Asset Management Co. in Beijing, which oversees the equivalent of $7.21 billion.

The Shanghai Composite has advanced 23 percent this year, the biggest among the 89 indexes tracked globally by Bloomberg, on optimism record new lending and the government’s 4 trillion ($585 billion) stimulus plan to build roads and housing will prevent the world’s third-largest economy from slumping.

China’s economy is showing “early signs” of stabilizing, the World Bank says. The lender cut its forecast for the nation’s economic growth this year to 6.5 percent in a quarterly report released in Beijing today. Its estimate was 7.5 percent in November.

Falling Oil Reserves

PetroChina added 1.3 percent to 11.04 yuan. China Petroleum & Chemical, which is also known as Sinopec, rose 1.3 percent to 8.53 yuan. Oil, which fell from a three-month high today, has risen 8.9 percent so far this year. Prices may advance to record levels in the future because of depleting reserves and a lack of major field discoveries, investor Jim Rogers said yesterday.

“Reserves of oil are going down all over the world,” Rogers said in a Bloomberg Television interview. “The price of oil has to go much, much higher. I don’t know if the oil price will go up to record level in three years or five years. I don’t know when, but I know it is.”

Jiangxi Copper climbed 5.7 percent to 19.75 yuan. Tongling Nonferrous Metals Group Co., China’s second-biggest copper producer, advanced 4.8 percent to 11.42 yuan.

Copper for June delivery on the Shanghai Futures Exchange gained as much as 1.5 percent on speculation that China may increase purchases and after better-than-expected U.S. housing data.

North China Pharmaceutical Co. climbed 5.1 percent to 10.08 yuan after China Business News said the government may publish its 850 billion yuan health-care spending plan as early as this week. Shanghai Pharmaceutical Co. gained 3.2 percent to 9.13 yuan, while Tianjin Tianyao Pharmaceutical Co. added 2.9 percent to 8.06 yuan.

The following companies were among the most active in China’s markets. Stock symbols are in brackets after companies’ names.

China International Marine Containers Co. (000039 CH), the world’s largest maker of shipping containers, added 2.2 percent to 7.86 yuan. The company received a 6.5 billion yuan bank facility from China Development Bank Corp.

China Shipping Development Co. (600026 CH), the nation’s biggest oil carrier, rose 3.2 percent to 10.84 yuan. China Shipping said profit last year rose 18 percent to 5.37 billion yuan. The company also expects sales to tumble 44 percent this year as a slowing economy saps demand for raw materials.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net