The SSE Composite Index, Shanghai's stock exchange and one of the world's largest, finished last week down 0.58% and closed at 3,013.41. Investors are nervous that banks will be forced to increase minimum reserves to combat the possibility of rising inflation, Reuters reports.
That could be a short-term overreaction. Strong quarterly reports from E-House
"But tread carefully here," says Tim Hanson, one of our China experts and co-advisor for our Motley Fool Global Gains service. "There are lots of signs of overcapacity in this specific industry, but there are certainly pockets of opportunity in China."
Pops and drops
Here's a closer look at the best- and worst-performing Chinese stocks of the past week, each of which trades on a major American exchange and is worth at least $150 million in market value. Returns are calculated from the March 5 close.
Last week's winners:
|
Company |
Percentage Gain |
CAPS Stars (out of 5) |
|---|---|---|
|
Fushi Copperweld |
17.5% |
**** |
|
Agria Corp. |
14.2% |
**** |
|
Nam Tai Electronics |
11.6% |
***** |
|
Funtalk China Holdings |
11.5% |
No rating |
|
New Oriental Education |
11.2% |
** |
Sources: Capital IQ, Motley Fool CAPS, Yahoo! Finance.
Last week's losers:
|
Company |
Percentage Loss |
CAPS Stars (out of 5) |
|---|---|---|
|
Acorn International |
(16.1%) |
***** |
|
China Security & Surveillance |
(14.9%) |
***** |
|
Universal Travel Group |
(12.4%) |
**** |
|
WuXi PharmaTech |
(11.6%) |
**** |
|
Deer Consumer Products |
(11.0%) |
* |
Sources: Capital IQ, Motley Fool CAPS, Yahoo! Finance.
A weekly tour of China
The week's top Chinese stock, Fushi Copperweld, on Wednesday reported a 121% increase in net income on a 26% increase in fourth-quarter revenue. Fushi is among the country's top producers of copper wiring for telecommunications, utilities, and transportation and is a favorite of Motley Fool CAPS investors.
"[This] company has a significant advantage ... as they are bringing superior British technology into the Chinese marketplace through their acquisition of Copperweld," wrote CAPS All-Star Desdemuerto in January.
Nam Tai Electronics rose on no apparent news, but rather investor interest in its super-cheap valuation. Even with last week's rally, the market value of this Global Gains pick is more than 85% denominated in cash and investments.
Finally, shares of China Security & Surveillance fell, after a Wednesday press release from the company said it would sell 20 million new shares of stock to pay down debt and fill its coffers. The company had just less than 69 million shares outstanding as of this writing.
What do you have to say about these stocks? Other Chinese stocks? Log into Motley Fool CAPS today and let your voice be heard. You can also weigh in using the comments box below.
