if chinese stocks at home are now off 44% from their all time high that means the index has to rise nearly 80% to recover. that's asking a lot me thinks. but what is the market really telling us ? to me it's saying at home in china there is a big slow down ahead as the steam has run out of the local growth engine. plus interest rates are going up strongly. all to slow things down a bit. OK, so where is that going to put the metal prices in a few months time ? off a bit me thinks. not forever of course but is this the correction coming for sure in china ? .......... just after the games as many have predicted here on hc.
be good,
40.
jolly bloomberg.
China's Stocks Complete Biggest Weekly Decline on Record
By Zhang Shidong
April 18 (Bloomberg) -- China's stocks slumped, driving the benchmark index toward a record weekly drop, on concern government measures to curb bank lending and restrict price increases will dent profits.
The CSI 300 Index has tumbled 44 percent from its record high on Oct. 16, wiping out at least $840 billion from the value of China's stock market. Utility stocks paced the decline today after Shanghai Electric Power Co. forecast a first-quarter loss on rising coal prices. PetroChina Co. fell below its November initial public offering price in Shanghai.
The CSI 300, which tracks yuan-denominated A shares listed on China's two exchanges, retreated 114.13, or 3.4 percent, to 3,272.50 at the close. The measure, which more than doubled in 2006 and 2007, has dropped 14 percent this week, the steepest weekly decline since its introduction in April 2005.
``It's panic selling and the confidence of the market has collapsed,'' said Chen Shide, who manages the equivalent of $212 million at GF Fund Management Co. in Guangzhou. ``The market has overreacted to the economic and corporate slowdown.''
All 10 of the benchmark CSI 300's industry groups dropped today. Just 10 stocks on the 300-member index have posted gains since the measure closed at its all-time high.
The economy expanded 10.6 percent in the first quarter, faster than estimated, while inflation was close to an 11-year- high, according to figures released by the statistics bureau this week.
Power Companies
China's central bank said two days ago it was raising the proportion of deposits that commercial banks must aside as reserves to a record 16 percent, reducing funds available for lending in an effort to slow down growth.
The People's Bank of China will increase the one-year lending rate from 7.47 percent, a Bloomberg News economist survey shows. The central bank raised interest rates six times last year.
Shanghai Electric Power, supplier of a third of the electricity in China's richest city, retreated 0.36 yuan, or 5.9 percent, to 5.74, the lowest close since Feb. 8, 2007. The company estimated a loss of about 120 million yuan ($17.2 million) in the first three months of the year, according to a statement today.
The inability to adjust power prices contributed to the loss, the statement said.
Huaneng Power International Inc., the listed unit of China's largest power group, slumped 0.45 yuan, or 6.2 percent, to 6.78, extending yesterday's 10 percent decline. GD Power Development Co., the Shanghai-listed unit of one of China's five largest electricity producers, dropped 0.45 yuan, or 7.6 percent, to 5.49.
PetroChina
``The increased coal prices and restrictions on raising what they can charge means the utility companies are effectively subsidizing society,'' Zou Xuyuan, Beijing-based analyst at China Galaxy Securities Co., the country's largest brokerage by value of securities transactions handled, wrote in a report.
PetroChina, the nation's biggest oil company, dropped 0.85 yuan, or 5 percent, to 16.02, falling below its initial offer price of 16.70 yuan for the first time since it began trading in Shanghai on Nov. 5. The stock has plunged 64 percent since reaching a record closing high of 43.96 yuan on Nov. 5.
Banks retreated on concern loan growth will slow. China Minsheng Banking Corp., the nation's first privately owned bank, lost 0.34 yuan, or 4.7 percent, to 6.94. China Construction Bank Corp., the country's second-largest bank, dropped 0.26 yuan, or 3.8 percent, to 6.60. Bank of China Ltd., the third-largest, fell 0.19 yuan, or 4 percent, to 4.51.
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, dropped 4 percent to 3,094.67. The Shenzhen Composite Index lost 4.2 percent to 930.63.
China Eastern Airlines Corp., the nation's third-largest carrier by fleet size, slumped 1.02 yuan, or by the 10 percent daily limit, to 9.23, a third straight day of declines. China Eastern was fined 1.5 million yuan and had flights suspended by the aviation regulator after pilots intentionally aborted several flights.
To contact the reporter on this story: Zhang Shidong in Shanghai at [email protected]
Last Updated: April 18, 2008 04:00 EDT
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