Stocks News
- Shares remain bullish
Date: 7-Aug-2007 Sources: (Shenzhen Daily)
METAL firms surged yesterday on strong earnings prospects and relatively low valuations, pushing stock indices to record highs.
Analysts generally said they expect the market to rise further in coming days, as a number of companies scheduled to issue first-half results next week are likely to report strong net profit growth.
The benchmark Shanghai Composite Index ended up 1.5 percent at 4,628.11, its highest ever settlement.
The Shenzhen Composite Index rose 2 percent to 1,350.37, also a record closing high.
Wang Junqing, an analyst at Guosen Securities, said the Shanghai index could test the psychological 4,700 level later this week and reach 5,000 by the end of August.
'Institutional investors have mainly been behind the market's bull run in recent weeks, as opposed to retail investors early this year. That's good, and means the market may rise more,'Wang said.
Zhu Haibin, an analyst at Essence Securities, said: 'More than 70 percent of listed companies are still far below their previous highs, but they are gaining the momentum to catch up with the recent gains of financial and property shares.'
Steelmakers led the market's rise as their net-profit growth over the year will likely exceed previous market expectations, said Zhu, adding their valuations are far below the market average.
Frank Gong, a JP Morgan economist, said the rise in steel prices will offset the cut in tax rebates on steel exports, and the consolidation of the domestic steel sector will help improve the ability of steel companies to negotiate iron ore prices on the global market.
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