Soy Sauce, Travel and herbs Are Rare Bright Spots in China's Battered Market

Soy Sauce, Travel and herbs Are Rare Bright Spots in China's Battered Market

China’s largest travel agency, a brewer of soy sauce and a maker of herbal supplements are on the list of few large companies which have defied China’this season s stock-market meltdown.

Asia Markets Snapshot

  • Stocks in China rose after last Friday’s U.S. stock selloff. The Shanghai Composite was 0 up.4%.
  • Hong Kong’s Hang Seng closed 0 down.4% in a holiday-shortened trading session. Japan’s market was closed.
  • China’s central bank guided the yuan 0.7% weaker contrary to the U.S. dollar to 6.9006 yuan.
What’s Happening

The benchmark Shanghai Composite Index has fallen nearly 24% this season, rendering it the worst performer on the list of world’s major indexes. The entire year many investors are sitting on losses for, but there have been several bright spots.

Of the 3,566 stocks listed on China’s two major bourses in Shenzhen and Shanghai, this season only 309 have recorded gains. Most were small-caps, and of the winners, 71 were new listings that have a tendency to succeed after their trading debuts on the mainland shortly, in accordance with data from Wind.

Fewer large-cap stocks did well. Of the 238 Chinese A-shares which were put into the benchmark MSCI Emerging Markets Index earlier this season, 22 have delivered positive returns just.

An investor sometimes appears at a stock market in Hangzhou, China, Oct. 22.

An investor sometimes appears at a stock market in Hangzhou, China, Oct. 22.


Photo:

Long Wei/Zuma Press

The top gainer was Yonyou Network Technology Co., a Beijing-based software and cloud services provider, which surged nearly 38% because the start of the year.

China International Travel Service
Corp.

, the nation’s largest travel agency, ranked second with a 35.2% increase.

Zhangzhou Pientzehuang Pharmaceutical
Ltd.

, a maker of popular medicines backed by herbal formulas from the Ming Dynasty jumped 32.8%.

Other gainers included stocks of companies that produce beverages and food, some IT companies and a small amount of industrial firms which have benefited from Beijing’s push to utilize infrastructure projects to greatly help revive its softening economy.

Foshan Haitian Flavouring and Food
Co.

, among the nation’s most profitable soy sauce makers, rose 23.4% gain while

Huadian Power International
Corp.

a power supplier, gained 29.2%.

What It Means

During this year’s market turbulence, investors have sought safety in defensive stocks such as for example power consumer and suppliers staples. Such stocks “have a tendency to stick out in a bear market for their low but steady earnings,” said Zhang Gang, Shanghai-based senior analyst at Central China Securities.

The low price-to-earnings ratios among Chinese utilities firms is a draw for investors also, said Yang Delong, Shenzhen-based chief economist initially Seafront Fund Management Co., which manages $6 billion worth of assets.

“China’s industrial sector is burdened by excess capacity. The near future is based on consumption,” he said, year adding that such stocks should continue being supported by investors next.

Write to Shen Hong at [email protected]

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