“China’s benchmark stock index rose, paring a weekly loss, after valuations dropped to the lowest level in three months. Airlines and railway shares advanced, overshadowing losses by property developers.
The Shanghai Composite Index (SHCOMP) climbed 0.4 percent to 2,278.40 at the close, after rising as much as 1.8 percent and falling as much as 0.9 percent. A gauge of volatility jumped to a 10-month high. The index is valued at 9.4 times projected 12- month earnings, according to data compiled by Bloomberg. The multiple dropped to 9.3 on March 13, the lowest since Dec. 21. Hainan Airlines Co. (600221) rallied 10 percent and Daqin Railway Co. advanced the most in almost a month.
“Stock valuations are low,” said Zhang Ling, general manager at Shanghai River Fund Management Co. “From a five-year horizon, prices will definitely be higher than the current level asChina’s economy is still growing. There are also expectations that the new premier will tackle structural problems such as high property prices and will boost consumption.”
Li Keqiang was elected premier by the nation’s legislature today, succeeding Wen Jiabao and making him in charge of economic policies. Xi Jinping became president yesterday, replacing Hu Jintao.
The Shanghai Composite dropped 1.7 percent this week amid concern the government is intensifying measures to curb asset bubbles and after industrial production and new lending data missed estimates. The 100-day volatility was at 19.2 today, the highest since May, while trading volumes were 4.1 percent lower than the 30-day average, according to Bloomberg data.
The CSI 300 Index added 0.2 percent to 2,539.87 today, while the Hang Seng China Enterprises Index (HSCEI) fell 0.7 percent, retreating 9.8 percent from a Feb. 1 high. TheBloomberg China- US 55 Index (CH55BN) climbed 0.6 percent yesterday in New York.
