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September 16, 2009

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Foreign investment helps market

SHANGHAI'S key stock index ended slightly higher yesterday as foreign direct investments in China climbed for the first time in 11 months, boosting investor sentiment.

The benchmark Shanghai Composite Index edged up 0.23 percent to 3,033.73 points, after swinging between gains and losses. Turnover rose to 160 billion yuan (US$23.53 billion) from 157 billion yuan on Monday. Gainers outnumbered losers 535 to 305, with 22 unchanged.

Foreign direct investment in China rose 7 percent last month from a year ago, rebounding from a 35.7 percent drop in July, the Ministry of Commerce said yesterday.

"A higher FDI means China is still attractive to foreign investors, and that will help to fuel faster economic growth, which could buoy the stock market," said Bai Taiping, a BOZ Research analyst.

Tire producers were strong after several companies said their businesses would be little affected by the US imposition of tariffs on tires shipped from China because those exports account for a small fraction of total sales.

"The US tariffs on Chinese companies mainly targeted tires for commercial vehicles and light trucks, while most listed tire makers have only small business in these areas," said Zhou Jian, an analyst with Guoyuan Securities Co.

Double Coin Holdings Ltd soared by the 10 percent daily limit to 20.9 yuan. Guizhou Tyre Co jumped 4.41 percent to 15.61 yuan.

Nonferrous metal producers advanced on higher commodity futures. Jiangxi Copper Co climbed 4.3 percent to 41.13 yuan after copper increased 1.8 percent on the Shanghai Futures Exchange. Aluminum Corp of China rose 4.5 percent to 15.1 yuan.

Financial shares were the losing side. China Construction Bank Corp, which has surged 17.7 percent this month, fell 1 percent to 5.99 yuan.


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