China’s stocks fell, led by industrial companies, on speculation the nation’s economic growth isn’t weakening enough for the government to enact large-scale stimulus.
Shipbuilder China CSSC Holdings Ltd. (600150) slumped 4.5 percent to its lowest level this month. China Mobile Ltd. slipped 2.2 percent in Hong Kong after reporting a drop in profit for the the fifth-straight quarter. Zhejiang Zheneng Electric Power Co. surged 9.9 percent amid a plan by provincial government to reform its state-owned enterprises.
The Shanghai Composite Index fell 0.3 percent to 2,350.02 at 1:12 p.m. local time. The Hang Seng China Enterprises Index (HSCEI) lost 0.2 percent. Gross domestic product rose 7.3 percent in the July-September period from a year earlier, the statistics bureau said today. While that exceeded the 7.2 percent median estimate in a Bloomberg News survey of analysts, it was also the slowest expansion since the first quarter of 2009.
“Third-quarter economic growth is stable and falls in line with market expectations,” Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai, said by phone today. “However, this also makes big pro-growth measures not likely in the near future.”
The Hang Seng Index slipped 0.2 percent. The CSI 300 Index (SHSZ300) declined 0.4 percent. A gauge of industrial companies dropped 0.5 percent, the biggest contributor to losses on the CSI 300.
China CSSC declined for a second day. AVIC Aircraft Co. fell 3.6 percent, heading for its lowest close since Sept. 23.
Economic Data
Industrial production rose 8 percent in September from a year earlier, compared with the 7.5 percent median estimate of analysts and August’s 6.9 percent, which was the slowest in more than five years. Retail sales increased 11.6 percent from a year earlier, compared with the 11.7 percent seen by economists and August’s 11.9 percent.
Fixed-asset investment excluding rural households increased 16.1 percent in the first nine months from a year earlier, the statistics bureau said.
China Mobile was poised for its lowest close since Sept. 30. Net income fell 12 percent to 24.9 billion yuan ($4.1 billion) in the third quarter, according to figures derived from nine-month results the Beijing-based company reported yesterday. That missed the 26 billion-yuan median of four analyst estimates compiled by Bloomberg.
China’s economic growth will slow to about 4 percent annually after 2020 following decades of rapid expansion, York-based research Conference Board group said in the report yesterday. China’s development model, based on state direction of capital and growth-fixated monetary policy, generated “deep seated” risks and imbalances, it said.
A gauge of pharmaceutical stocks slumped 1.1 percent. China Resources Double-Crane Pharmaceutical Co. slid 4.7 percent, the biggest drop on the CSI 300.
Upcoming IPOs
Zhejiang Electric headed for the highest close since Dec. 20. The province of Zhejiang completed its reform plan for state-owned enterprises and will announce the plan once gaining approved, Zhejiangonline.Com reported yesterday.
Nine companies including Liaoning Kelong Fine Chemical Co. will market initial public offerings from Oct. 23. The sales may lock up more than 700 billion yuan of bids, the Securities Daily reported today. The companies plan to raise 3.7 billion yuan by selling 443 million shares, according to the report.
Today’s declines trim the Shanghai Composite’s gains this year to 11 percent. The index is valued at 8.5 times 12-month projected earnings, compared with 6.5 times for the Hang Seng China index, according to data compiled by Bloomberg. Trading volumes in the index were 17 percent below the 30-day average for this time of day today. The Hang Seng China gauge has lost 5.1 percent this year.
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net; Weiyi Lim in Singapore at wlim26@bloomberg.net
To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net
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