April 1, 2014 (Chinavestor) Utilities, consumer cyclical, and energy stocks outperformed the rest among NYSE and NASDAQ listed Chinese stocks in March. As a matter of fact, all other sectors ended the month in the red. Technology, consumer durables and transportation stocks suffered the most in March 2014.
When it comes to liquidity, an issue with foreign listings, investors had little chance to take advantage of consumer stocks. Reason being that their thin volume makes trading cost too expensive to buy and sell on the large scale. Instead, investors were confined to utilities, or rather a single stock from the sector, Huaneng Power International (NYSE:HNP).
The third best shot for China stock investors was the energy sector for the month. Energy stock rose 2.2% on average, led by Yanzou Coal Mining (NYSE:YZC). China's third largest coal miner advanced 6.7% in March. WSP Holdings (NYSE:WH), a small cap, oil industry products related manufacturer, surged 26.5% but this is a stock with low trading quality. It doesn't have sufficient trading volume nor has credible market cap. Back to the big boys of the sector. Petrochina Co. Ltd. (NYSE:PTR) rose 2.7% and Sinopec (NYSE:SNP), China's largest oil refiner, advanced 1.2% in March. Only CNOOC Ltd. (NYSE:CEO), China's offshore oil driller, ended the month in the red among energy stocks.
Chinese Sectors on the NYSE and NASDAQ, March 2014. Bubble size indicates market capitalization.
Stock prices within the Chinese technology sector contracted 9.7% in March on average. Industry leader Baidu Inc. (NASDAQ:BIDU) fell 10.9% followed closely by Sina Corp. (NASDAQ:SINA). Sohu.com Inc. (NASDAQ:SOHU) declined as much as 23.4%, the worst month in a year. 58.com Inc. (NYSE:WUBA) fell 11.97% and 500.com Inc. (NYSE:WBAI) slipped 16.9%. Youku Tudou (NYSE:YOKU) fell 15.5%, just to name a few well known issues that suffered. Chinese solar stock declined even more... Part of the problem is that the IPO of King Digital Entertainment (NYSE:KING) late March revealed that China's online game industry may not be as dynamic and profitable as many hoped for. All major Chinese technology stocks fell hard in the last week of March as a result.
Just as consumer cyclical, consumer durable stocks are unfit for serious investors. This gives that the Chinese transportation sector is our next target when it comes to weak sectors for the month. Transportation stocks fell 5.4% on average. The decline was led by China Eastern Airlines (NYSE:CEA), China's second largest carrier by fleet size. China Southern Airlines (NYSE:ZNH) fell 5.5% followed closely by Guangshen Railways (NYSE:GSH). Seaspan Corp. (NYSE:SSW) minimized damaged and actually advanced 1.2% for the month.
Health care, services, basic materials all fell in March, just as the chart above testifies.