Most China Stocks Decline, Led by Utilities, Shipping Companies

By John Liu

April 14 (Bloomberg) -- Most Chinese stocks fell, led by power producers and shipping lines, as electricity demand retreated and China Merchants Energy Shipping Co. said earnings dropped.

Huaneng Power International Inc., the listed unit of China’s largest power group, sank 0.6 percent after output fell last month. China Merchants Energy Shipping lost 2.1 percent. Zhongjin Gold Corp., the country’s second-largest by market value, added 2.9 after bullion jumped the most in three weeks.

“It looks like earnings aren’t rebounding,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Everyone is betting on better earnings in the second quarter, but that’s still uncertain.”

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, fell 7.41, or 0.3 percent, to 2,506.29 as of 10:01 a.m. local time. About five stocks fell for every three that rose. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, fell 0.1 percent to 2,653.12.

Sichuan Changhong Electric Co., China’s second-biggest television maker, dropped 0.2 percent after saying last year’s earnings probably slumped.

The Shanghai Composite’s 38 percent gain this year makes it the second-best performer among the 88 primary stock gauges tracked by Bloomberg globally. Stocks have rallied on optimism the government’s 4 trillion yuan ($585 billion) stimulus package and record new lending will spur a recovery in the world’s third-largest economy amid the global recession. Interest rates were cut five times from September to December.

China’s economy probably expanded 6.3 percent from a year earlier in the first quarter, the slowest pace in almost 10 years, according to the median estimate of 12 economists surveyed by Bloomberg News. The statistics bureau is due to release the figure on April. 16.

Huaneng

Huaneng Power sank 0.6 percent to 7.88 yuan. Datang International Power Generation Co., a unit of China’s second- biggest electricity producer, lost 0.3 percent to 7.52 yuan.

China’s March power output fell about 2 percent from a year earlier as the world’s third-biggest economy slowed, an official from the China Electricity Council said, citing preliminary data compiled by the industry group. He declined to be named before the data’s release.

China Merchants Energy Shipping, the country’s largest operator of international oil tankers, slid 2.1 percent to 5.62 yuan. The company said profit tumbled 57 percent in the first quarter because of a decline in freight rates.

Changhong Electric fell 0.2 percent to 4.58 yuan. The company said profit may slump more than 50 percent in 2008 because operations were hurt by the 7.9-magnitude earthquake that hit Sichuan province in May.

Zhongjin Gold jumped 2.9 percent to 59.52 yuan. Shandong Gold Mining Co., China’s third-largest bullion producer, increased 1.5 percent to 77 yuan. Gold futures for June delivery climbed 1.4 percent to $895.80 an ounce in New York yesterday, the biggest gain for a most-active contract since March 19.

To contact the reporter on this story: John Liu in Shanghai at jliu42@bloomberg.net