Chinese firms, state media seek to soothe frayed nerves amid market slump

3 minute read
Register now for FREE unlimited access to Reuters.com

SHANGHAI, March 10 (Reuters) - China's largest listed company this week set off a string of unusual corporate announcements touting strong performance, and state media have sought to reassure investors as the country's financial markets slumped to more than 20-month lows.

Kweichow Moutai Co Ltd (600519.SS), China's largest listed firm by market capitalisation, on Monday announced that its net profit attributable to shareholders in the January-February period had risen 20% from a year earlier.

Moutai's news was followed by a flurry of similarly reassuring statements from some 30 companies. Jiangxi Coppper (600362.SS) said January-February profit had risen around 150% and Semiconductor Manufacturing International Corp (SMIC) said profits were up nearly 95%.

Register now for FREE unlimited access to Reuters.com

Listed companies in China typically post financial guidance and results quarterly, not on a monthly basis.

"Monthly operating results are disclosed voluntarily ... if companies that have not made these disclosures before and are now actively doing so, it may be because of special considerations," said Rukim Kuang, founder of Lens Company Research.

"The market inference that they want to stabilise confidence is well-founded."

China's blue-chip CSI300 index (.CSI300) has plunged as much as 9.5% this week, hit by a combination of concerns over the growth outlook and a worsening conflict in Ukraine. At one point on Wednesday afternoon, the CSI300 had fallen more than 20% from a December high, before regaining footing late in the day.

The index jumped 2.3% on Thursday amid a global market rally.

Global financial markets have been volatile since Russia launched what it called a "special military operation" in Ukraine on Feb. 24, with world stocks falling heavily, oil and other commodities surging, and the Russian rouble plunging.

On Thursday, a state media outlet echoed the corporate reassurances, arguing in a front-page story that the resilience and sound fundamentals of the Chinese economy have provided a solid foundation for the stable and healthy development of financial markets.

The official Shanghai Securities News cited officials from domestic listed companies as saying that recent short-term disturbances in the A-share market were mostly driven by external factors and should not last long.

The paper said that companies were prepared to take steps to stabilize market expectations to boost investor confidence.

More than 40 companies listed in Shanghai and Shenzhen including Qi An Xin Technology Group Co Ltd (688561.SS) and Zhejiang Chint Electrics Co Ltd (601877.SS), have revealed in exchange filings plans to buy back their own shares, with some others disclosing plans to increase their holdings, the paper reported.

Register now for FREE unlimited access to Reuters.com
Reporting by Winni Zhou and Andrew Galbraith; Additional reporting by Jason Xue in Shanghai and Meg Shen in Hong Kong; Editing by Bernard Orr

Our Standards: The Thomson Reuters Trust Principles.