Stocks had a dismal week following lingering weakness in the
property markets. The holiday shortened week began on a dismal note
with markets moving downwards on Tuesday following losses by
property and consumer staples shares.
Stocks lost again on Wednesday following concerns that
government measures to boost economic growth would be unable to
cure the slump in the property markets. Ultimately, indexes gained
today, though trading volumes declined substantially.
) reported losses during first quarter 2014 while
) said it expects to raise $1 billion from dollar denominated
Last Week's Developments
The benchmark index ended the session on Friday nearly unchanged. A
surge in nickel shares and gains in auto shares was offset by
losses made by property companies. Nickel shares chalked up gains
following speculation that prices would rise further following
media reports of a shortage next year. The Shanghai Composite Index
declined 0.1% while the CSI 300 gained 0.1%. The Hang Seng China
Enterprises Index moved up 0.6%.
According to a report in the China Securities Journal, the
government was finalising measures which would open up the economy
to a greater degree. The Shanghai Composite Index gained 0.6% in
May while the CSI 300 lost 0.1%. The Hang Seng China Enterprises
Index gained 4.8% over the month, experiencing its highest monthly
gains since September last year.
Markets and the Economy This Week
Markets on the mainland and Hong Kong were closed on Monday.
The HSBC PMI Index increased from 48.1 in April to 49.4 in May.
This is the index's highest level in four months indicating that
the economy was firming up despite job losses and weakness in the
property market.The Bloomberg China-US Equity Index gained 0.5%.
Stocks declined on Tuesday with the benchmark index erasing gains
made during the day's during the last minutes of trading. Consumer
staple and property companies took losses. According to
SouFun Holdings Ltd.
), China's home prices declined in May for the first time in two
years. The Shanghai Stock Exchange Property Index lost 0.7%,
falling to its lowest level since May 22.
The Shanghai Composite Index declined by less than 0.1% while the
CSI 300 lost 0.3%. The Hang Seng China Enterprises Index gained
0.8%. Analysts were of the view that the increase in the HSBC PMI
and the proposal to reduce reserve requirements would not be able
to reduce concerns of an economic slowdown.
The Shanghai Composite Index moved down 0.7% on Wednesday, taking
losses for the fourth successive day. The decline was caused by
fears that steps being taken by the government to boost economic
growth would not be able to cure the slump in the property market.
Property stocks and shares of companies with linkages to home
purchase also declined. The Shanghai Property Index lost 1.1%,
increasing its yearly losses to 5.6%. The Hang Seng China
Enterprises Index lost 0.5%. Rare earth companies also moved lower,
Stocks moved higher today as volatility in Chinese stocks declined
to an all time low. A decline in equity investment reflected by
lower trading volumes has led to the benchmark index's 50 day
volatility fall to 12.5, the lowest level since a decade. In fact,
the benchmark index snapped the 12th consecutive day of changes
within a range of 1% at the close.
The Shanghai Composite Index gained 0.8% while the CSI 300
increased 1.1%. The Hang Seng China Enterprises Index moved up
0.5%. Meanwhile, the HSBC Services PMI declined from 51.4 in April
to 50.7 in May.
Stocks in the News
reported a loss per American Depositary Share (ADS) of 14 cents in
the first quarter of 2014, wider than the Zacks Consensus Estimate
of a loss of 5 cents per ADS. However, loss in the reported quarter
was narrower than the year-ago loss of 45 cents per ADS. The
year-over-year improvement was driven by strong shipments to Japan.
ReneSola's net revenues of $415.0 million advanced 46.0% from
$284.2 million in the prior-year quarter but decreased 5.4% from
$438.8 million in the sequentially preceding quarter. The reported
figure fell short of the Zacks Consensus Estimate of $465.0 million
The year-over-year improvement in sales was driven mainly by higher
shipment to Japan at a much higher price. In addition, the
company's continuous effort to convert more of its silicon wafers
into solar photovoltaic (PV) modules brought considerable sales
Operating loss during the quarter was $8.7 million as compared to
an operating income of $8.8 million in the fourth quarter of 2013.
However, the quarterly loss was much narrower than the year-ago
loss of $33.4 million.
has said that it expects to raise $1 billion from the sale of U.S.
dollar-denominated bonds. At 2.75%, the bond coupon has been set
1.25 percentage points higher than U.S. five year Treasury Bonds.
The benchmark includes only USD-denominated debt that is due to
mature in less than five years. The coupon being offered is lower
than the 3.25% rate for the company's $1 billion bond issue in
Baidu has stated that the net proceeds would be used for general
corporate purposes. Goldman Sachs (Asia) L.L.C. and J.P. Morgan
Securities LLC will act as joint book-running managers for the
Moody's Investor Services - the credit rating agency of
) - assigned an "A3" rating to the proposed notes. The A3 rating
carries a stable outlook. Moody's anticipates sustainable growth in
Baidu's user traffic and online advertising services in the growing
Jiayuan.com International Ltd.
) posted first quarter 2014 loss per share of $0.08, lower than the
Zacks Consensus Estimate of loss per share of $0.12. The company
reported revenues of $21.6 million for the quarter. Jiayuan.com is
a Chinese online dating portal.
Shares of the company gained 2.12% on Tuesday. The company also
released its outlook for second quarter 2014. Jiayuan expects net
revenue within RMB145 million to RMB147 million during this period.
Performance of Most Actively Traded US-listed Chinese
The table given below shows the price movements of 10 Chinese
companies with the highest three-month average trading volume on
U.S. exchanges. Price movements over the last five days (May 29-
June 5) and during the last six months have been included.
Last 5 Day's Performance
6 month performance
Next Week's Outlook:
Stocks have experienced a dismal week following the continued
slump in property markets. Market watchers have also raised
concerns about whether government action would be able to end the
woes of the sector. Economic data has been mixed, with the HSBC
manufacturing index increasing and the services index undergoing a
decline in May.
Next week features several key economic indicators. These
include official reports on the trade balance, inflation, retail
sales and industrial production. If most of these reports are on
the positive side, markets may be able to extend the gains made
today going forward.
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BAIDU INC (BIDU): Free Stock Analysis Report
RENESOLA LT-ADR (SOL): Free Stock Analysis
SOUFUN HLDG-ADR (SFUN): Free Stock Analysis
JIAYUAN.COM INT (DATE): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
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