CHICAGO, Sept. 5, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the PetroChina Co. Ltd. (NYSE:PTR-Free Report), Baidu, Inc. (Nasdaq:BIDU-Free Report), CNOOC Limited (NYSE:CEO-Free Report), China Unicom (Hong Kong) Limited (NYSE:CHU-Free Report) and China Telecom Corp. (NYSE:CHA-Free Report).
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Here are highlights from Thursday's Analyst Blog:
China Stock Roundup
Markets enjoyed a terrific run and the benchmark index moved increasingly upward over the week. Speculation of new stimulus measures from the government pushed stocks upward on Monday. Defense stocks led gains on Tuesday, following indications that the government will boost defense expenditure. Media stocks helped markets move upward on Wednesday.
Today, markets moved upward for the fifth successive day after easing of financing norms for developers led to gains for real estate and financial companies. PetroChina Co. Ltd. (NYSE:PTR-Free Report) reported earnings that increased year over year, while Baidu, Inc. (Nasdaq:BIDU-Free Report) made an investment in indoor mapping software developer IndoorAtlas Ltd.
Last Week's Developments
Stocks moved upward last Friday, led by gains from tech and defense companies. A report in Shanghai Securities News that China may provide military research assets into certain listed companies led to gains in defense stocks.
The Shanghai Composite Index advanced 1% while the CSI 300 gained 1.2%. A measure of tech stocks increased 1.8%, the largest gain since Jul 29. The ChiNext also added 1%. The Hang Seng China Enterprises Index added 0.3%. The Bloomberg China-US Equity Index gained 0.4%.
However, the benchmark index plunged 1.1% over the week, marking its largest decline since Jun 29. Concerns that new share sales will lure funds away from older stocks were the primary reasons for the slump. As the introduction of IPOs increased the demand for funds, the overnight loans rate on the Shanghai Stock Exchange increased to its highest level since 2007. Analysts believe that the lure of IPOs and disappointing earnings numbers for cyclical stocks meant that the focus had shifter to nascent industries.
Markets and the Economy This Week
The Shanghai Composite Index gained 0.8% on Monday, its highest level in a week. Speculation increased that the government would implement new stimulus measures to boost the economy, boosting the markets. Such speculation arose after the pace of expansion in the manufacturing sector declined. The HSBC PMI's final reading came in at 50.2, lower than July's reading of 51.7.
Taken together with lower-than-expected credit, production and investment data for July, such data increased pressure on the government to attain this year's growth target. The CSI 300 increased 0.7%. A rally in tech stocks led to a 2% gain for the ChiNext. The Hang Seng China Enterprises Index declined 0.1%.
Stocks increased once again on Tuesday, led by tech and defense stocks. Speculation that the government will increase defense expenditure in an effort to boost growth led to such gains. These gains follow a statement from the Chinese President encouraging further innovation in the nation's armed forces and a focus on "information warfare," according to the Xinhua News Agency. The Shanghai Composite Index moved up 1.4%, to its highest level since Jun 5, 2013.
This was the third successive day of gains for the benchmark even as speculation increases that the government will take further steps to boost the economy. Given its territorial disputes with many countries, defense expenditure is expected to receive a boost. The CSI 300 added 1.3% while a sub-index of consumer staples gained 1.5%. The Hang Seng China Enterprises Index increased 0.1%.
Gains in media stocks helped the Shanghai Composite index extend its gains on Wednesday. The benchmark index increased 1% after the Shanghai Securities News said Shanghai Media Group will merge its units and list the new entity. The merged entity will have a market value of around 100 billion yuan ($16.3 billion). This development was accompanied by bullish services sector data. Official non-manufacturing PMI moved up to 54.4 from 54.2 in July, which was its lowest level in six months.
Meanwhile, the HSBC services PMI increased to 54.1 in August from 50 in July. This was a dramatic jump, from a nine-year low to its highest level in nearly one and a half years. Shipping companies helped the CSI 300 advance 0.9%. The increase in services sector data helped the Hang Seng China Enterprises Index jump 3.2%. This was its largest gain in 10 months.
The Shanghai Composite Index gained 0.8% today, extending its gains into a fifth successive day. The benchmark index touched its highest level in 15 months after financial and real estate stocks registered gains. A media report which claimed that the government will allow real estate companies to issue mid-term notes through the interbank market triggered these increases. This will help developers reduce funding costs.
Such a measure is similar to easing credit norms, indicating that the government is putting in place new measures to achieve this year's growth target of 7.5%. The CSI 300 advanced 0.7%. Sub-indices of energy and pharma companies were the biggest losers among the 10 industry groups. The Hang Seng China Enterprises Index gained 0.6%, building on Wednesday's record gains.
Stocks in the News
PetroChina Co. Ltd. announced its first-half 2014 earnings of RMB 68.1 billion or RMB 0.37 per diluted share, compared with RMB 65.5 billion or RMB 0.36 per diluted share a year earlier. Earnings per ADR came in at $6.03 (exchange rate: US$1.00 = RMB 6.1, 1 ADR = 100 shares).
PetroChina's total revenue for the six months increased 4.8% from the year-earlier period to RMB 1,154 billion.
A remarkable improvement in PetroChina's Refining & Chemicals business, along with a higher oil and gas equivalent output drove the results.
PetroChina posted strong upstream output growth during the six months ended Jun 30, 2014. Crude oil output – accounting for 65.1% of the total – rose marginally by 0.3% from the year-ago period to 465.6 million barrels (MMBbl), while marketable natural gas output was up 7% to 1,495.5 billion cubic feet (Bcf). PetroChina's total production of oil and natural gas increased 2.5% year over year to 714.9 million barrels of oil equivalent.
The company's Refining & Chemicals business registered an operating loss of RMB 3.4 billion, considerably narrower than the year-earlier period's loss of RMB 15.9 billion.
Due to a significant increase in operating expenses, PetroChina's natural gas business profit dropped 81.3% year on year to RMB 4.1 billion during the first six months.
CNOOC Limited (NYSE:CEO-Free Report) reported disappointing first-half 2014 interim results. Net profit decreased 2.3% year over year to 33.59 billion yuan (US$5.47 billion), or 0.75 yuan per share, mainly due to higher costs. Oil and gas sales were 117.1 billion yuan ($19.1 billion), up 5.7% year over year.
In the first half of 2014, CNOOC recorded net production of 211.6 million barrels of oil equivalent (MMBoe), up approximately 6.8% from the year-ago level. The improvement was mainly attributable to the production contribution from the acquisition of Nexen Inc, the new oil and gas fields, production efficiency of Buzzard oilfield in the U.K. North Sea and ramp-up of activities at Long Lake oil sands projects.
The company's average realized oil price increased 2.0% year over year to $106.30 per barrel. Realized gas price rose 13.5% to $6.44 per thousand cubic feet (Mcf) from the year-ago level.
China Unicom (Hong Kong) Limited (NYSE:CHU-Free Report) and China Telecom Corp. (NYSE:CHA-Free Report) have won regulatory approval to expand their 4G network trial to 40 cities, up from the previous 16.
In Jun 2014, the carrier duo received the green signal from the Ministry of Industry and Information Technology (MIIT) to conduct a pilot test on two of the most recognized 4G LTE (Long Term Evolution) standards in 16 different cities. The recent sanction extends the trial by 24 additional cities in the mainland, which includes the likes of Beijing, Guangzhou and Tianjin, among others.
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