Brokerages lead shares to highest end in 3 years
Print Edition
SHANGHAI stocks jumped the most in 15 months yesterday, sending the benchmark index to a three-year high, led by brokerages on hopes of good earnings growth after a surge in trading.
The Shanghai Composite Index soared 3.11 percent to 2,763.55 points — the highest close since July 2011 — on turnover of 397.2 billion yuan (US$64.5 billion). Yesterday’s trading volumes were 65 percent above the 30-day average, according to data compiled by Bloomberg News.
“Investors poured funds into high-quality, blue-chip financial firms on hopes of a strong stock market performance,” said Zhang Qi, an analyst for Haitong Securities.
The Shanghai index has risen 31 percent this year, heading for the biggest annual gain since 2009. The gauge plunged 35 percent from the start of 2010 through the end of last year.
Massive gains in share prices in the previous week have whetted investors’ appetite, Shenyin & Wanguo Securities said.
And Tang Yonggang, chief investment adviser at Hong Yuan Securities, said: “The liquidity-driven strength in the stock market will extend.”
Investors pursued brokerages on rosy profit outlook of securities firms relying on trading commissions as their main source of revenue.
Founder Securities, Everbright Securities and Soochow Securities all surged by the daily limit of 10 percent to 10.88 yuan, 21.41 yuan, and 17.82 yuan.
Coal producers also received a tonic following a reform in the tax formula for coal resources under which tax is now charged based on the sales price instead of on the sales volume previously. The government also decided to waive unnecessary fees for coal companies.
Industrial Securities said the reform will reduce the production cost for coal producers.
Shaanxi Heimao Coking and Yunnan Coal & Energy rose by the 10 percent daily cap to 22.54 yuan and 6.89 yuan. Shaanxi Coal Industry gained 4.1 percent to 7.05 yuan.
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