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JPMorgan: quake not to dampen China corporate profit

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Profit for China's publicly traded firms may increase 20% in 2008, despite the strong quake that shook southwest China, according to JPMorgan Chase.

“The quake would have limited effect on the national GDP growth and further tightening on the economy is unlikely in the second half of this year,” Li Jing, China head of JPMorgan Chase said at a press conference held on Friday.

“Sichuan is a major province that provides farm produces like pork, a staple meat for Chinese people, and the consumer prices in the southwest region might rise substantially,” she said.

“The regional gross domestic product (GDP) growth would also be affected in the second quarter but its GDP makes up only a minor part of the national GDP,” she said.

Last year, the province saw its GDP value reaching 1.05 trillion yuan ($150 billion), accounting for 4% of the revised national figure, which was 24.953 trillion yuan.

“The national economic climate in second quarter would no doubt outperform the first one that was the worst in history,” said Li, adding some enterprises in financial, manufacturing, consumption and energy industries could see higher profit rise.

Bottom-line growth of large domestic banks may be up to 40% in the second half of this year, thanks to a wider net interest margin, development of infrastructure and better assets quality, she said.

While industries like textile, garment and furniture are suffering loss since 2005, high value-added providers including electronic and telecom equipment sectors are witnessing rising profits, Li said.

“China's shipment and machinery equipment will be competitive in the international market,” she added.

The Sichuan earthquake, measuring 7.8 on the Richter scale on Monday, had taken more than 21,500 lives and buried 14,000 others as of 4 p.m. Friday, according to vice governor of Sichuan Li Chengyun.

He said that 159,000 people were injured in the massive earthquake and 4.8 million people had been relocated. (Xinhua)

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