Benchmark index ends week up 2.2%
Print Edition
SHANGHAI shares rose yesterday, ensuring the market ended the week in positive territory, amid speculation the government is preparing for another fund injection.
The Shanghai Composite Index ended the day up 2.3 percent and the week up 2.2 percent at 3,744.21 points. Despite the gains, trading activity remained low at 445.5 billion yuan (US$71.77 billion), or 40 percent below the 30-day average.
In a report by Bloomberg News, anonymous insiders were quoted as saying that China Securities Finance Corp, the state agency that provides margin financing loans to securities companies, is planning to invest an additional 2 trillion yuan in shares in a bid to bolster the market.
“This implies sufficient market-support funds to continue to provide a downside cushion to the equity market as the later stages of retail deleveraging unfold,” Goldman Sachs analyst Liu Chenjie said in a report.
The government likely spent between 860 billion yuan and 900 billion yuan supporting the stock market in June and July, and will inject more funds if needed, the report said.
Shenzhen Zhengtong Electronics Co, which makes secure payment products, was among the big winners yesterday, rising by the 10 percent daily limit to 22.53 yuan, while SDIC Xinji Energy Co rose 6.6 percent to 14.59 yuan.
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