China Market falls on profit booking

The Mainland China equity market declined for second straight session on Wednesday, 29 August 2018, as investors elected to book profit after strong rally in recent sessions and as traders shifted focus to the next batch of proposed tariffs from the Trump administration, covering $200 billion worth of Chinese imports. Around afternoon trade, the benchmark Shanghai Composite Index declined 0.35%, or 9.75 points, to 2,768.23, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.68%, or 10.21 points, to 1,487.49. The blue-chip CSI300 index dropped 0.47%, or 15.96 points, to 3,384.21.

NEWS FROM THE PRESS: 68% of listed firms see net earnings grow in H1 -- A total of 68.2 percent of listed firms on the Shanghai and Shenzhen bourses posted year-on-year growth in net profits for the first half of 2018, according to reports from the Economic Information Daily. As of yesterday morning, among the 2,361 listed companies that have published financial data for the period, 1,616 saw net profits rise from the previous year, while 190 suffered declines. Out of all the companies, 383 saw their net profits at least double from the previous year. Operating revenue of the 2,361 listed firms gained 14 percent to 10.24 trillion yuan (US$1.5 trillion). Better performance in corporate profits came from the upstream cyclical industries, including oil, steel, building material and chemical industries. Listed companies in sectors including new energy vehicles, biomedical and communication reported rising profits as new growth drivers continue to boost China's economy.

 

Baosteel to reduce exports to US in second half -- BAOSHAN Iron & Steel Co. expects to reduce exports to the United States in the second half this year but will keep total exports stable, a company executive said in at an investor briefing yesterday. Known as Baosteel, China's biggest listed steel producer warned about the risks of trade protectionism in its first-half earnings statement issued Monday. Baoshan reported a 62.2-percent surge on first-half net profit on firm steel prices, but warned about the risks of trade protectionism in the second half of the year. The company exported 3.84 million tons of steel products in 2017, with 10.1 percent selling into America. The Shanghai-based steel giant posted net income of 10.01 billion yuan (US$1.46 billion) in the first half of 2018, compared to 6.17 billion yuan a year ago, according to a statement to the Shanghai Stock Exchange. In the first six months, Baosteel churned out 23.96 million tons of steel products. The company also said it had cut 3.12 billion yuan of cost in the first half of this year, outstripping its target 2018 target of reducing 1.8 billion yuan.

CURRENCY NEWS: China's yuan weakened against the U.S. dollar on Wednesday, inline with softer mid-point fixing by People Bank of China. Prior to the market opening on Wednesday, the PBOC set central parity rate of the Chinese currency renminbi, or the yuan, at 6.8072 per dollar, weakened by 20 basis points from 6.8508 on Tuesday.

OFFSHORE MARKET NEWS, US stock market closed higher on Tuesday. The Dow Jones Industrial Average jumped 14.38 points or 0.1% to 26,064.02, the Nasdaq ticked up 12.14 points or 0.2% to 8,030.04 and the S&P 500 inched up 0.78 points or less than a tenth of a% to 2,897.52.

The major European stock markets ended mixed on Tuesday. The German DAX Index edged down by 0.1%, while the French CAC 40 Index crept up by 0.1% and the U.K.'s FTSE 100 Index climbed by 0.5%.

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