Shanghai Indexes in Bear Zone

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
14 May, 2010
New York City

Stocks in Shanghai dropped today and for the year declined more than 20%. China plans to encourage private investment in hospitals, community health services. Poly Real Estate''''s contracted sales rise 16.2% in the year to April. Hedge fund manager Soros took a stake in Alibaba.com.

[R]6:00 PM Hong Kong, China – Stocks in Shanghai dropped today and for the year declined more than 20%. China plans to encourage private investment in hospitals, community health services. Poly Real Estate''s contracted sales rise 16.2% in the year to April. Hedge fund manager Soros took a stake in Alibaba.com in third quarter of 2009.[/R]

Chinese stocks continue to fall pushing the benchmark index to a bear market territory.

‘Buying opportunities are getting more and more with the market going down’, said Mark Mobius who handles the $34 billion emerging-market assets as the executive chairman of Templeton Asset Management Ltd in an interview in Seoul yesterday.

China Securities Regulatory Commission said yesterday that the agency has not stopped approving IPOs.

Foreign direct investment in April rose 24.7% from a year earlier to $7.35 billion, a ninth monthly increase in a row, the Commerce Ministry said.

China will encourage private investors to set up hospitals, community health services and take part in restructuring of public hospitals, the state council said in a statement. This caused the CSI 300 Healthcare Index to gain 2.1%, in April from a year earlier.

China is facing an extremely complicated economic situation this year and needs to shift focus more towards private investment in order to sustain growth momentum, said the National Development and Reform Commission in a statement on its Web site.

China failed to attract enough bids at the auction for a 20 billion yuan offering 273 day bills for a second time after the previous sale on April 9 was also not completed.

The People’s Bank of China announced on May 2 it would raise the reserve ratio by 50 basis points to 17% with effect from May 10 to slow inflation.

The central bank added 152 billion yuan into the financial system this week to prevent cash shortage at some lending banks after they said they have less capital available for the new reserve-requirement ratio.

Hang Seng index in Hong Kong decreased 277.03 or 1.36% to 20,145.43 and CSI 300 index in China slipped 18.89 or 0.65% to 2,868.02.

Shanghai Movers

Aluminum Corporation of China Limited, the maker of aluminium, also called Chalco fell 1.1% to 10.57 yuan.

Jiangxi Copper Company Limited, the producer of copper, fell 1.2% to 30.60 yuan.

Kangmei Pharmaceutical Co., Ltd, the drug maker, rose 3.6% to 14.39 yuan.

Poly Real Estate Group Co., Ltd decreased 1.5% to 10.92 yuan after the major property subsidiary of state-owned Poly Group, yesterday announced that its contracted sales rose 16.2% year-on-year to 12.22 billion yuan in the first four months of this year, sources reported.

Shenzhen Development Bank Co., Ltd dropped 1.8% to 18.37 yuan.

HK Movers

Alibaba.com Limited rose 4.3% to HK$15.68 after the online commerce site said Friday billionaire investor George Soros bought shares in the company in the third quarter of 2009 and is now one of the top three holders of its publicly-traded shares.

Parkson Retail Group Limited fell 0.1% to HK$11.62 after it was downgraded to “equal-weight” from “overweight” by Morgan Stanley.

PetroChina Company Limited dropped 0.3% to HK$8.86 after the company plans test operations in June at its 200,000 barrel-per-day Qinzhou refinery, its first major downstream foothold in southern China and expects the start of commercial runs in August, company sources said.

Ping An Insurance (Group) Company of China, Ltd, the insurer, fell 2.7% to HK$61.75.