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Cars and steel drive stock market higher at midday

By Pan Xiaoyi | March 23, 2009, Monday | Online Edition

SHANGHAI'S key stock index rose for a sixth day in the morning session, driving the benchmark to the longest winning stretch in more than 17 months, as steelmakers and automakers gained on the government's support measures.

The benchmark Shanghai Composite Index added 1.24 percent, or 28.31 points, to close at 2,309.4 points. Turnover stood at 70.89 billion yuan (US$10.43 billion). Gainers outnumbered losers 735 to 104 and 37 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 1.79 percent to close at 765.84 points.

China plans to create five steelmakers accounting for more than 45 percent of output within three years and the nation's 15 biggest automakers will be consolidated into 10 companies, the State Council said in a statement on March 20. Taxes on steel imports and exports will be also reviewed.

Baoshan Steel, which is owned by China's largest steelmaker, added 1.4 percent to 5.79 yuan, a one-month high. Angang Steel Co, the second-largest, advanced 2.54 percent to 8.48 yuan. Wuhan Steel, the third-largest, added 2.1 percent to 6.8 yuan.

The government will support moves by Baosteel Group Corp, parent of Baoshan Steel, to take over Ningbo Iron & Steel Group and Baotou Iron & Steel Group as part of the stimulus plans, according to the statement. The government will also encourage local steelmakers to buy assets overseas as it seeks to boost competitiveness and raw-material purchasing power.

SAIC Motor, the nation's biggest domestic carmaker, gained 1.68 percent to 9.7 yuan. Jiangling Motors Corp climbed 5.51 percent to 6.7 yuan. Beiqi Foton, the biggest commercial-vehicle maker, advanced 2.61 percent to 9.45 yuan.

China aims to revive nationwide auto sales growth to 10 percent this year and for the next two years, the State Council said. Vehicle sales rose 6.7 percent last year, the slowest pace in a decade, to 9.4 million, according to the China Association of Automobile Manufacturers. The group predicted a 5 percent increase this year in January.

Zijin Mining Group Co, China's largest gold producer, advanced 7.85 percent to 10.71 yuan after reporting a 20 percent increase in earnings because of higher bullion prices and increased output.

Zhongjin Gold Corp, the country's second-largest by market value, gained 8.05 percent to 62 yuan while Shandong Gold Mining Co, the No. 3, jumped by the 10 percent daily limit to 81.87 yuan.

PetroChina Co, the nation's biggest oil company said it has issued 15 billion yuan (US$2.2 billion) in three-year notes. The shares lost 0.09 percent to 11.56 yuan.

Shanghai Airlines Co, the second-largest carrier in the city, won an 8 billion yuan credit line from Bank of China Ltd to fund aircraft purchases and increase liquidity. The stock gained 2.26 percent to 4.97 yuan.

ZTE Corp, China's second-biggest phone-equipment maker said it signed an agreement for a US$15 billion loan facility from National Development Bank. The shares fell 0.99 percent to 34.95 yuan.
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