The Shanghai Composite Index (SCI) retreated this week after a short and sharp charge returning from the National Holiday period. At the final bell, the score was 2,976.63, knocking off 0.11% from last week’s close.
China Vanke (000002.SZ) was a stellar performer this week, fueled by an announcement that sales values for the first three quarters grew 29.6% year-on-year to US$6.76 billion. The Shenzhen-based developer’s September sales grew 27%, pushing the share price up an immodest 5.38% for the week to finish at RMB11.55 (US$1.69). We’re keeping the faith in our Chinese property play and are happily holding onto it.
Jiangsu Expressway (600377.SH) was somewhat behind the eight-ball this time around, lagging the SCI by a very disappointing 1.77%. Despite Wellington Management upping its stake recently, US-based Fidelity International has cut its H-share holding, releasing US$2.38 million worth of shares into Hong Kong and dampening sentiment around the company’s A-shares. This certainly hasn’t helped us in the short term: Jiangsu fell 1.66% to RMB5.93 (US$0.87). But let’s not forget that this experienced toll-roadie posted a first-half profit of US$141.35 million, up 14.58% from the year before. China’s going to need roads and Jiangsu knows how to run them. Stay tuned next week, as third-quarter results will be released on October 21.
Looking at the broader economy, exports may have turned a corner in the third quarter and could very well join domestic demand with steady growth. If things look positive, we may be looking to capitalize.
The Capitalist Roader Fund is down 31.9% since June 3, 2008. The SCI is down 13.4%.