ShengdaTech, Inc. (SDTH)

Forecaster1 (24.47) Submitted: 11/02/07 2:40 PM : Start Price: $7.19 SDTH Score: 46.62

The following article states that the fund managers for Chinese Social Security have been directed to reduce their stock holdings 30-50 percent in the next month. Will this affect the price of SDTH or just stock traded in China going forward regardless of earnings? If anyone has any information on this please reply. This is the link and article:

http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=56135&sid=16097181&con_type=1


Pension fund reaps 7.7b yuan from A shares

KathyWang

Friday, November 02, 2007

China's Social Security Fund sold some of its heavily held A shares to cash 7.7 billion yuan (HK$7.996 billion) in the third quarter, seeking to optimize investment portfolio when stock indexes kept touching highs, according to mainland media reports.
The National Council of Social Security Fund has required its managers to reduce stock holdings of 30 to 50 percent. That means fund managers have to cash 40 to 60 billion yuan from the stock market in the coming month, China Securities Daily reported.

The fund raised HK$484 million by selling 68.7 million shares in Industrial and Commercial Bank of China (1398) on October 25, a filing to the Hong Kong stock exchange showed.

During the third quarter, SSF reduced its heavily held companies to 136 from 176 the previous quarter, reaping 7.7 billion yuan. However, there are no signs the fund is withdrawing the money out of the booming market.

SSF is one of China's biggest investment institutions. Through a technical adjustment strategy, the fund safeguarded its investment profits by cashing in the most profitable stakes in the third quarter. Meanwhile, it targets more profit by upgrading the quality of its assets in the last quarter of 2007.

In particular, the fund is withdrawing from the mining and metal companies, while boosting stakes in energy firms, including Sinopec (0386).

Shares of Sinopec jumped 9.4 percent to close at HK$12.76 yesterday, after the central government raised retail gasoline prices due to the domestic diesel shortage caused by the record world crude oil prices.

By the end of October, all 1,519 companies listed on the Shanghai and Shenzhen stock exchanges had released their third-quarter results. Weighted earnings per share reached 0.2887 yuan, up 45.75 percent from last year. Net asset yield rose to 11.33 percent, a 2.37 percent gain, according to Sina Finance.

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