Government's proactive policy pushes shares up
( 2003-12-02 09:01) (China Daily)
China's shares closed up yesterday, helped by a buying spree in banking stocks after the government said it would maintain its proactive fiscal policy and deepen reforms in the debt-ridden lending sector.
The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, finished 2.54 per cent higher at 1,432.703 points.
Top Chinese leaders, at a meeting that ended on Saturday, decided to continue to follow a "proactive fiscal policy" next year to help expand domestic demand, according to a weekend announcement.
"The meeting signalled China's economy would continue to grow strongly, and investors believed that was a positive factor for the stock market," said analyst Xi Weidong at Jinxin Securities.
The government will also select one or two major State banks to pilot long-awaited industry reforms, and will allow Nanjing City Commercial Bank to launch a domestic share issue possibly in 2004, the China Banking Regulatory Commission said yesterday.
Analysts said the policies would help the development of the sector and boost the bottom line of China's five listed banks.
Pudong Development Bank, in which Citigroup, the world's largest financial services company, owns 4.62 per cent, closed up 3.86 per cent at 9.68 yuan (US$1.17).
China Merchants Bank jumped 3.66 per cent to 9.9 yuan (US$1.20), Huaxia Bank rose 2.71 per cent to 6.81 yuan (82 US cents), Shenzhen Development Bank rose 2.63 per cent to 8.6 yuan (US$1.04) and Minsheng Bank rose 2.4 per cent to 8.92 yuan (US$1.08).
The Shanghai index has risen 8.8 per cent over the past two weeks, helped by technical buying in large-capital companies.
"About 90 per cent of stocks closed up yesterday, indicating most investors now expect the market to rise further in the near term," said analyst Cui Haiping at Beijing Securities.
Large-cap stocks such as top Chinese steel maker Baosteel yesterday helped prop up the market, brokers said.
Baoshan Iron and Steel Co Ltd, the world's fourth most valuable steel maker, was one of the day's most active counters, jumping 4.39 per cent to end at a fresh record of 7.13 yuan (86 US cents).
Baosteel has soared 73 per cent since the start of year on strong prospects of the company and China's steel industry.
On the foreign exchange market, China's yuan ended three notches weaker versus the US dollar at 8.2773 but still remained at the stronger end of its managed trading range.
Turnover, which rose to US$670 million on Friday, dropped to US$540 million in yesterday's trading. The yuan softened to 7.5718 versus 100 Japanese yen from 7.5681 and weakened against the euro to 9.9460 from 9.8623.
Copper futures up 3%
In the futures market, Shanghai copper futures leapt to their 3-per cent daily limit in early trade yesterday and clung there throughout the day, supported by gains on the London Metal Exchange (LME), traders said.
Shanghai's most active June contract climbed its limit of 440 yuan (US$53) to 21,590 yuan (US$2,608) a ton, while all others gained between 440 yuan (US$53) and 580 yuan (US$70).
Volume shrank by almost half to 72,490 lots from Friday's 137,652 lots, with trade thinning out rapidly once contract limits had been attained.
"Although there was some trading later in the day, investors were reluctant to sell, so prices just stayed where they were," said one Shanghai trader.
"I expect to see prices continue to rise in the short term," said another. "They should top previous highs before we see another correction."
LME three-month copper was quoted at US$2,085/US$2,090 a ton in Asian trade by 0400 GMT yesterday, after surging a staggering US$51 to US$2,070 in Friday's kerb session.
|
