Strong year ahead for Shanghai, say analysts

The Shanghai Composite Index ended 0.24 percent higher at 5497.901 points yesterday. Ten Shanghai A shares rose to their 10 percent daily limit.

Turnover in Shanghai A shares shrank to 141.6 billion yuan from Friday's 173.5 billion yuan.

With the main index rebounding from 4836 points in mid-December, resistance could be seen at 5500-5600 points, a trader said.

But the medium-term outlook for the stock market remains strong, some analysts said.

Galaxy Securities forecasted the Shanghai Composite Index was likely to hit 7000 points this year as firms are expected to post an average of about 40 percent growth in net profit.

Some analysts said the Shanghai index was likely to set a new record high in the first quarter as listed firms were poised to report strong growth in their 2007 annual earnings.

The index is still about 11 percent below its record high of 6124 points set on October 16.

Steel shares maintained their upward trend, with Handan Steel jumping 6.32 percent to 10.76 yuan. The stock has soared 33 percent so far in January.

Jinzhou Port jumped 10 percent to a record high of 11.89 yuan. There have been rumours that the company may restructure its assets under a government-backed plan.

Shandong Wanjie High-tech jumped by its 5 percent daily limit to 6.88 yuan after saying it would place 882 million new shares at no less than 5.78 yuan apiece to buy property stakes worth up to 5.9 billion yuan.

However, large-cap stocks such as banks and oil producers were weak, capping gains in the Shanghai Composite Index.

HK stocks hit

Hong Kong stocks fell yesterday with cellphone maker Foxconn, Hong Kong Exchanges and Clearing Ltd and shipping stocks hard hit by worries over a possible US economic recession.

Heavyweight China Mobile also closed lower amid speculation a restructuring could undercut its dominant position as China's top wireless provider.

The city's bourse operator HKEx, the day's top traded stock, sank 6.1 percent as investors fretted about a weakening market.

The benchmark Hang Seng Index ended down 1.48 percent, or 398.88 points, at 26468.13.

The China Enterprises Index of H shares, or Hong Kong-listed shares in mainland companies, closed 2.23 percent lower at 15480.10.

Mainboard turnover eased to HK$109.7 billion from HK$128.7 billion on Friday.

Agencies

(China Daily 01/15/2008 page15)