Index rallies to close above 4,500
Print Edition
SHANGHAI stocks surged to close above 4,500 points yesterday after media said China will cut the number of its central government-owned enterprises by more than half to 40 to focus on quality.
The Shanghai Composite Index rallied 3.04 percent to 4,527.4 points.
Investor sentiment was bullish after media reports said the State-owned Assets Supervision and Administration Commission will encourage mergers and acquisitions among centrally-administered state-owned enterprises as part of the country’s efforts to build industrial giants that are capable of competing internationally.
It is estimated the total number of central SOEs will be cut by more than half to 40, as authorities have emphasized quality as a priority in SOE reforms.
The SASAC administers 112 SOEs which are parents to 227 listed companies. The combined total market value is more than 10 trillion yuan (US$1.6 trillion), with SOEs engaged in major sectors including energy, military industries, and public services.
However, SASAC responded, after trading closed, through a statement on its website that the media didn’t verify the information in their reports with the agency.
Shares of China Petroleum and Chemical Corp, also known as Sinopec, and PetroChina Co jumped by the 10 percent daily limit to close at 8.56 yuan and 14.65 yuan.
China’s top oil refineries were reported to be eying a merger to compete effectively with global rivals. But the merger report was later dismissed by the two companies.
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