Baosteel, Angang Ratings Raised by Credit Suisse (Update1) Email | Print | A A A
By Chen Shiyin and Helen Yuan
Jan. 12 (Bloomberg) -- Baoshan Iron & Steel Co. and Angang Steel Co. and two other Chinese steelmakers had their ratings raised by Credit Suisse Group because of expectations improving demand will help boost prices.
Baoshan Steel, Angang, Wuhan Iron & Steel and Maanshan Iron & Steel Co. were raised today to “outperform” from “neutral” by Credit Suisse analysts led by Trina Chen in a report. A government stimulus plan will bolster demand for basic materials, including cement and steel, they said.
China is spending 4 trillion yuan ($584 billion) to stimulate its economy on infrastructure projects such as railways and housing. Domestic steel prices have rebounded 43 percent to 4,073 yuan a metric ton from Nov. 13 after tumbling 52 percent from a record high of 5,957 yuan on June 5, according to the Beijing Antaike Information Development Co.
“We expect improving steel prices would pave way for the outperformance of the stock in the coming three to six months,” Credit Suisse said.
Angang, China’s second-largest steelmaker, fell as much as 4.8 percent to HK$7.90 in Hong Kong today, trading at $8.00 at 10:10 a.m. local time. The benchmark Hang Seng Index fell 1.5 percent. Baoshan, the biggest, fell as much as 1 percent to 4.90 yuan, trading at 4.91 yuan at 10:11 a.m. in Shanghai.
Premier Wen Jiabao said Jan. 2 that the government was drawing up plans to support the steel and car industries after growth in the world’s fourth-largest economy sagged.
