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Markets

Mainland stocks at 3-month high

(China Daily)
Updated: 2010-04-15 09:09

SHANGHAI: Mainland stocks rose to a three-month high as speculation of a stronger yuan and accelerating inflation spurred a rally for gold producers, countering declines by developers.

Zhongjin Gold Corp, the country's second-largest bullion producer by market value, jumped 8.1 percent to 56.43 yuan ($8.27), the most in four months after UBS AG said yuan revaluation will boost the appeal of gold.

Poly Real Estate Group Co, the second-biggest developer, slid 0.8 percent to 18.79 yuan on concern of further tightening after property prices jumped by a record last month.

"Expectations about inflation and yuan appreciation have boosted the appeal of gold as an alternative investment," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "Property stocks are what investors should avoid now because you don't know how harsh the upcoming measures will be and how that may affect developers' profitability."

The Shanghai Composite Index gained 4.93, or 0.2 percent, to 3166.18 at the close, the highest since Jan 19. The CSI 300 Index added 0.4 percent to 3403.71.

Xinjiang Tianye Co, a Chinese chemical company, led gains among Xinjiang and Tibet-based companies after the State Council said it will encourage foreign-invested firms to move to the nation's west and central regions.

The China Securities Journal reported on Wednesday that Beijing and four provinces will provide financial aid and build infrastructure projects in Xinjiang.

Xinjiang Tianye climbed 5.3 percent to 13.88 yuan, the highest close since June 2008. Xinjiang Urban Construction rose 6 percent to 14.58 yuan and Tibet Galaxy Science & Technology Development Co increased 1.8 percent to 13.49 yuan.

Citic Securities Co slipped 0.4 percent to 28.68 yuan after new stock account openings slid to a two-month low.

The number of stock-trading accounts opened in China fell 40 percent last week from the previous week to 240,951, according to the China Securities Depository & Clearing Corp.

Hang Seng rises

Hong Kong stocks rose, reversing a decline, as China-related shares gained on optimism of increased economic growth, and after a Chinese government economist said the nation may not need to raise interest rates before June.

The Hang Seng Index rose 0.1 percent to 22121.43 at the close, after falling as much as 0.2 percent. The Hang Seng China Enterprises Index was little changed at 12842.47.