CHO NHƯNGC BÁC NÀO LO LẮNG VỀ CK TQ

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China''s Stocks Advance After Slump; China Vanke, ZTE Lead Gains

By Zhang Shidong

March 2 (Bloomberg) -- China''s stocks rose as some investors judged this week''s tumble, the biggest in four weeks, as excessive. China Vanke Co., the nation''s No. 1 property developer, led an advance by shares that had fallen the most.

``The market has been calming down and has stabilized after the rout,'''' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai, which oversees about $517 million. ``Confidence will return as we see all the fundamentals still support an upside.''''
The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China''s two exchanges, advanced 35.19, or 1.4 percent, to 2508.73 at the close. The measure had a 6.3 percent tumble this week, its biggest drop since the five days to Feb. 2.

The Shanghai Composite Index, which tracks the bigger of China''s stock exchanges, gained 1.2 percent to 2831.53. The Shenzhen Composite Index, which covers the smaller one, rose 1.5 percent to 730.55.

Stocks had their steepest declines in a decade on Feb. 27 amid concern that a government crackdown on investments with borrowed money will end a rally that drove benchmarks to records.

China''s plunge, coupled with concern the U.S. economy would slow, sparked a worldwide rout this week. The Dow Jones Industrial Average has fallen 3.2 percent in the last three sessions, while stocks across Europe and Asia also declined, extending their worst slump in four years and wiping out more than $1.5 trillion in global market value.

`Short-Term Correction''

The economy, which in 2005 overtook the U.K. as the world''s fourth largest, averaged annual growth of 9.6 percent in the past five years. It expanded 10.7 percent last year.

``This is more of a short-term correction rather than a bear market,'''' said Beat Lenherr, who helps manage $7 billion of assets in Asia as Singapore-based chief investment officer at LGT Bank. China ``is my favorite BRIC market.'''' The BRIC countries are Brazil, Russia, India and China.

China Vanke rose 0.38 yuan, or 2.7 percent, to 14.39. The shares slid 14 percent this week. ZTE Corp., China''s biggest publicly traded phone-equipment maker, gained 2.42 yuan, or 5.2 percent, to 49.30, erasing this week''s losses.

Daqin Railway Co., the operator of China''s biggest coal transport network, added 0.63 yuan, or 5.9 percent, to 11.23, cutting this week''s slide to 9.1 percent. Shanghai International Port (Group) Co., the operator of China''s biggest port, gained 0.19 yuan, or 2.5 percent, to 7.92, trimming the weekly decline to 6.5 percent.

`Strong'' Fundamentals

The 300 index is valued at 39 times earnings, compared with 15 times for the Morgan Stanley Capital International Emerging Markets Index.

``A 25 P/E ratio is appropriate for China''s stocks,'''' Lorraine Tan, director of research at Standard & Poor''s Investment Services, said in Beijing yesterday. ``The correction is short term because economic fundamentals are still very strong. The market will come back in about three months.''''

A measure of the 300 index''s 10-day volatility is at 67 percent today. The measure was at 69 percent yesterday, the highest ever in its two-year history. Volatility has exceeded 64 percent each day this week, up from 21 percent on Feb. 26, before a five-day holiday for the Lunar New Year.

Meanwhile, Maanshan Iron & Steel Co. fell after the nation''s manufacturing rose in February at the slowest pace in six months. The Purchasing Managers'' Index dropped to 53.1 from 55.1 in January, the National Bureau of Statistics said in an e- mailed statement.

The decline ``may indicate a downturn in the economy, but it will not be large,'''' said Zhang Liqun, a senior research fellow at the State Council''s Development Research Center.

Maanshan Steel lost 0.27 yuan, or 4.1 percent, to 6.39. Inner Mongolian Baotou Steel Union Co. slid 0.31 yuan, or 5.5 percent, to 5.34.

To contact the reporter on this story: Zhang Shidong in Shanghai at at szhang5@bloomberg.net

Last Updated: March 2, 2007 02:25 EST

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