China: Futures rise; energy producers may be active

[HONG KONG] Chinese stock-index futures rose as the Shanghai benchmark gauge headed for a monthly gain.

Futures on the CSI 300 Index expiring in March, the most active contract, added 0.6 per cent to 3,609.40 as of 9.17am local time. Energy producers may move after crude plunged.

The Shanghai Composite Index climbed 2.2 per cent to 3,298.36 on Thursday, its highest level since Jan 28, as speculation of new stimulus measures intensified before the National People's Congress convenes its annual meeting next week. The gauge has advanced 2.7 per cent this month, during which mainland markets were closed for a week for holidays.

The CSI 300 Index added 2.5 percent yesterday, the Hang Seng Index rose 0.5 per cent, while the Hang Seng China Enterprises Index gained 1.35 per cent. The Bloomberg China-US Equity Index, the measure of the most-traded US-listed Chinese companies, added 0.4 per cent in New York.

China should loosen monetary policy to reduce the impact of the economic slowdown on jobs, according to a commentary in China Securities Journal. The country's export outlook in 2015 is still "grim," Commerce Minister Gao Hucheng said on a national trade teleconference on Thursday.

Margin traders increased holdings of shares purchased with borrowed money for a second day yesterday.

The outstanding balance of margin debt on the Shanghai Stock Exchange climbed to 778.9 billion yuan (US$124 billion) on Thursday from 771 billion yuan a day earlier, exchange data show.

China's A shares still have room to gain as valuations are at reasonable levels, Goldman Sachs China vice-chairman and chief investment strategist Ha Jiming of the private wealth management division said in an interview yesterday.

The Shanghai gauge trades at 12.9 times 12-month forward earnings, compared with a 10-year average of 15.6 multiple.

BLOOMBERG