Banking shares give key index a heave

By Ding Yining | February 26, 2009, Thursday |

Print Edition

SHANGHAI'S key stock index rebounded from its loss in the morning session and closed slightly higher yesterday, led by the banking sector.

The Shanghai Composite Index edged up 0.27 percent, or 5.92 points, to 2,206.57. Turnover was 131.7 billion yuan (US$19.25 billion). Gainers outnumbered losers 450 to 407 and 51 stocks were unchanged.

The Industrial and Commercial Bank of China edged up 0.27 percent to 3.71 yuan. Shanghai Pudong Development Bank advanced 4.02 percent to 17.09 yuan while the Bank of China added 0.94 percent to 3.23 yuan and China Construction Bank climbed 1.96 percent to 4.16 yuan.

"The index may enter a period of adjustment until the end of the second quarter of this year, and we suggest investors pay more attention to listed companies that are likely to get support from the government such as agricultural, machinery and construction firms," according to a research note by Guosen Securities.

Auto makers were among the gainers after China pledged to encourage consolidation in the industry in a bid to enhance the competitiveness of an industry hit by slowing sales. Media reports cited unnamed sources as saying China may encourage Shanghai Automotive Industry Corp and China FAW Group Corp, its two biggest auto makers, to buy rivals in a bid to revive the car industry.

SAIC Motor Co, China's largest car maker, edged up 0.79 percent to 8.90 yuan and FAW Car Co, a Chinese partner of Mazda Motor Corp, advanced 3.02 percent to 10.92 yuan.

China Life Insurance Co, the nation's biggest insurer, sought to buy a 10 percent stake in Hong Kong's Wing Hang Bank Ltd from the Bank of New York Mellon Corp last year, Hong Kong's stock regulator said. Its shares added 1.34 percent to 21.20 yuan.

Property developers fell as the industry is not likely to receive incentives from the government and demand for property continues to fall, analysts said. China Vanke Co, China's largest publicly listed property developer, retreated 3.32 percent to 7.57 yuan.

Finance

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Banking shares give key index a heave

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