Foreign interest should help boost flagging bourses

In black or red?

On the other hand, five major industries have seen big losses during the first three quarters.

Shipping companies listed on the A-share market, for instance, had total losses of 7.38 billion yuan, and iron and steel producers registered total losses of 3.09 billion yuan, according to Wind Information.

China Ocean Shipping Company, the country's largest shipping business, suffered the largest loss among more than 2,000 listed companies. It registered a loss of 6.4 billion yuan in nine months until September, its quarterly report said.

Gloomy global trading and weak market demand proved a considerable drag on the shipping giant's net profits, said Han Yichao, an analyst from Changjiang Securities Co Ltd.

"In the fourth quarter, shipping prices may rebound slightly as infrastructure construction speeds up supported by the (government's) investment policy - but a dull season is coming," Han said.

Of the 10 companies that registered the biggest losses, six were in the iron and steel sector, including Angang Steel Co Ltd, Magang Group Holdings Co Ltd and Hunan Valin Iron & Steel Co Ltd.

In the first three quarters, the steel industry registered losses of 3.09 billion yuan, against profits of 226.3 billion yuan in the same period last year.

"The problem of excess production capacity is very serious in the steel sector, which may continue to reduce profits for the whole year," Wistrategy Consulting said.

Wang Mingde, an analyst from Dongxing Securities Co Ltd, said all of China's A-share public companies are expected to see a 1 percent drop in net income this year.

By Dec 12, the Shanghai Composite Index had retreated 5.67 percent this year and remained one of the few major bourses still in the red. The fall meant it had lost about a quarter of its value since early 2011.

The average price-to-earnings ratios of A shares dropped to about 12 times, compared to 14 times in the second half of 2008.

"Overseas investors will be the main driving force to push up stock indexes next year," said Sun Yu, an analyst in China from HSBC Holdings Plc, adding that the relatively low assessment values of mainland shares have considerable room to rise.

He predicted that the benchmark index may increase by 20 percent in 2013, along with the expected rebound in the macro economy and deepened structural reforms.

Contact the writer at chenjia1@chinadaily.com.cn

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