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China's shares rose yesterday, the third day of a technical rebound, as punters shopped for loss-making companies like travel agency Hainan Dadonghai Tourism, brokers said.
The Shanghai Composite Index moved up 23.179 points, or 1.52 percent, to end at 1548.104 yesterday, while Shenzhen's increased by 37.93 points, or 1.23 percent, to 3126.87.
Shanghai's hard currency B share index ended up 0.78 percent at 139.285 points, while Shenzhen's rose 1.21 percent to 212.92 in thin trade.
Turnover on the B share markets, open to foreign and Chinese investors, came to just US$11.43 million in Shanghai and HK$84.90 (US$10.88) million in Shenzhen, though trade was more active than on Monday.
The market kicked off a rebound on Friday after a seven-week downtrend shaved 10 percent off share indices and shoved the 14-day Relative Strength Index to below the oversold threshold of 30 since September 26.
"Tuesday's rise was a continuation of the rebound while further gains will depend on whether trading volumes can be expanded significantly," said a Huaxi Securities analyst.
Shenzhen-listed Dadonghai was Tuesday's star performer, closing up 4.9 percent at HK$2.57 (32.9 US cents) with 4.27 million shares changing hands, making it the day's most active B share.
Another loss maker, Forever Bicycle, was Shanghai's biggest gainer and climbed 2.71 percent to 64.5 US cents.
Chinese punters typically speculate on loss makers in hopes that government-orchestrated corporate asset restructurings will help them reverse their fortunes, brokers said.
But investors punished telecoms equipment maker Nanjing Putian Telecommunications after the firm announced on Tuesday it was likely to post a loss for the third quarter of this year due to weak demand for networking gear.
Its counter slid 3.33 percent to end at HK$4.65 (59.6 US cents).
Analysts said Nanjing Putian, which produces mainly global systems for mobile communications networking gear, was hit by sliding investment in traditional markets as mainland operators turn to more advanced or alternative technology.
Shares of SP Power rebounded yesterday after it posted a 13 percent increase in its three-quarter profit ended to September.
The company had seen its share price drop sharply in recent weeks following reports saying its parent company's president has disappeared or has been arrested.
The company registered a net profit of 470.86 million yuan (US$56.94 million) during the nine months to September, from 416.33 million yuan (US$50.34 million) a year earlier. Earnings per share amounted to 0.34 yuan (4.1 US cents), down 33 per cent from the 0.51 yuan (6.1 US cents) a year earlier.
SP Power's shares inched by 4.42 percent to end at 7.8 yuan (94.3 US cents).
Still, analysts said funds and other institutional investors would build positions in the run-up to the 16th Congress of the Communist Party, scheduled to start November 8.
Investors often conduct window-dressing buying on stock markets ahead of major political events or public holidays.
"As the Party Congress approaches, institutions have become more active," said a trader at Shenyin and Wanguo Securities.
She noted combined volume for domestic A shares, reserved for Chinese investors, nearly doubled on Tuesday versus Monday.
While analysts said volume was still not big enough to push up share indices significantly, some believe the benchmark Shanghai composite index was likely to rise another 4 per cent to 1,600 points by the time of the congress.
Indices have generally fallen since early September on a spate of negative factors, including frequent share issues, poor corporate earnings and a government crackdown on market corruption.
(China Daily October 23, 2002)
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