Weekly Report for June 11th-15th

In the week June 11th-15th, the index of Shanghai Stock and
Shenzhen Stock markets continued to rebound from the recent
bottom and enjoyed a weekly increase of 5.62% and 6.59%
respectively.
   The Ministry of Finance PRC announced an important policy to
reduce export and increase import. Since July 1st, 2007, the
export rebates for goods under 687 HS codes including most of
inorganic chemicals, dyestuffs, pigments, coatings and
fertilizers will be cancelled. MOF also decreases the rates of
export rebate on goods under more than two thousand codes. The
export rebates on basic organic chemicals, pesticides,
auxiliaries, synthetic resins, rubbers and fibers were reduced
to 5%. This policy also targeted to control pollution, reduce
energy consumption, eliminate the foam in stock market and calm
down the heavily investment, showing a firm decision of the
government.
   Analysts comment that the companies majored in phosphorus
chemicals, pesticides, pigment manufacturing sectors may be
impacted seriously, including Hubei Xingfa Chemicals (SH:
600141), Hubei Sanonda (SZ: 000553), Hunan Haili Chemical (SH:
600731). What is surprised is that these three companies enjoyed
the top weekly increase of their share prices. The sole
possibility to explain the surprise is that the policy will beat
out many of small and medium scale companies operating in those
sectors but have a temp impact on those top players, implying
that the policy will help Hubei Xingfa or Sanonda reduce
competitors.
  Explanation from the central government certified such a
viewpoint that the policy is not simply aiming to control export
and enhance import, but to promote local demand and force the
local manufacturing companies to upgrade their technology.   
     

By Peter Zong  

Ticker or Code    Company name    Category
    Closing    1-Week    YTD    Trailing P.E.     Weekly volume
    Marketcap     
            price    change    change    P.E.     change        
            RMB    %    %        %    mn RMB    
000036    China Union Holdings     FM
    9.19     -4.3     95.5     54.1     2.83     10329     
600094    Shanghai Worldbest    FM
    5.68     -11.7     16.6     -2.9     8.58     2793     
000059    Liaoning Huajin Tongda    CF
    12.88     6.7     251.0     99.1     -10.85     8542     
000155    Sichuan Chemical    CF
    11.93     12.5     169.9     40.6     67.48     5607     
000420    Jilin Chemical Fibre    FM
    9.00     0.2     258.6     150.0     19.81     3404     
000422    Hubei Yihua Chemical    CF
    16.55     10.9     248.4     41.7     -25.38     8976     
000498    Dandong Chemical Fibre    FM
    5.06     -9.3     153.0     -5.4     40.85     1973     
000510    Sichuan Jinlu    BI
    9.47     26.8     268.5     82.6     33.32     5769     
000515    Chongqing Titanium     BI
    19.00     17.3     196.0     172.7     31.50     3557     
000523    Lonkey Industrial     SC
    8.25     3.0     115.4     131.0     -14.24     1424     
000525    Nanjing Redsun    SC
    10.42     -0.3     47.6     89.4     -13.41     2920     
000553    Hubei Sanonda    SC
    23.24     33.3     407.4     300.6     82.71     6901     
000554    Sinopec Taishan Petroleum    PC
    8.64     -2.5     41.6     54.0     -6.79     4154
000565    Sanxia Paints     SC
    14.25     23.4     240.1     385.1     54.97     2471
000584    Sofcra Special-Typed Fiber    FM
    14.43     14.5     370.0     671.2     -21.92     4377
000589    Gui Zhou Tyre    PR
    9.40     2.0     99.2     39.8     -22.65     2391
000599    Qingdao Doublestar    PR
    7.46     5.1     194.9     85.7     25.55&