Commodities Help Pare Annual Losses in Shanghai


Asian markets rose Friday. In China the Shanghai Composite climbed 1.8% to 2,808 and in Hong Kong the Hang Seng rose 0.2% to end the day at 23,035. Markets in Japan were already closed for the New Year.

In a last great push for the year, shares on Shanghai's big board advanced 1.8%, paring the Shanghai Composite's annual loss back to 14%. According to data from Bloomberg, this puts the guage in last place among the world's 14 biggest benchmark indexes. Help was on the way from metal miners, including those supplying rare earths to the rest of the world. A whopping 97% of all rare earths come from China, which has recently slashed the quantity of the elements that they will export -- pushing up prices and increasing demand.

Rare earths miners did especially well with Sichuan Western Resources , Tongling Nonferrous Metals and China Nonferrous Metal Industry all rising by the daily maximum of 10%. Rising Nonferrous Metals Share Co., another rare earths miner, shot up 5%. Copper producers benefited from a hike in the value of th metal. Yesterday copper hit a record high of $9,447 per ton, racking up a 27% gain for the year. Yunnan Copper rocketed up the 10% daily limit and Jiangxi Copper climbed 7.6%.

Aluminum producers also saw big gains with Yunnan Aluminum Co. surging 4.7% and Aluminum Corp. of China, otherwise known as Chalco, jumping 2.4%.

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Airlines continued to rise, thanks to a strengthening of the yuan against the dollar, slashing debt costs. Among the winners were China Southern Airlines, which gained 2.1% and China Eastern Airlines and Air China, which both leaped 2%. Hainan Airlines, which ferries holiday-makers and shoppers to China's tropical paradise island, saw a 4.4% advance. As of tomorrow, shoppers in Hainan will get an 11% tax rebate on purchases, reports Caixin Online. This could make it a major destination for Chinese consumers whose national pastime includes bargain hunting.

Other winners included energy producers. Guizhou Panjiang Refined Coal surged 10% while Shangxi Coal International Energy Group racked up a 6.9% gain and Jizhong Energy Resources added 6.2%.

In Hong Kong, the Hang Seng Index finished off the year with a 5.3% gain. Today's winners included oil producers with Cnooc jumping 1.3% and PetroChina rising 1%. Among coal energy providers China Coal advanced 1% and China Shenhua added 0.8%.

Hong Kong carmaker, Guangzhou Automobile Group motored up 2.3% after saying it has agreed to buy a 50% stake in a motorcycle manufacturer. Great Wall Motor also surged, heading 7.4% higher. But it wasn't such good news for Brilliance China, maker of China's BMWs, which plunged 3.3% and Geely, the new owner of the Volvo brand, which sank 2.6%. BYD, Warren Buffet's eco car darling managed a 1.8% gain, good, but not enough to battle its 40% loss for the year.

Better luck next year, Warren.