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October 22, 2016

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Infrastructure firms help shares end up

SHANGHAI shares eked out small gains yesterday as a rebound in infrastructure companies helped counter jitters over a sustained weakness of the yuan.

The Shanghai Composite Index added 0.21 percent to 3,090.94 points. For the week, the index rose 0.89 percent.

“Infrastructure companies led the market up in the past two weeks, driven by optimism over reform of state-owned enterprises,” HSBC Jintrust Fund Management Co said in a note.

State-owned infrastructure firms gained the most. Power Construction Corp of China surged by the daily limit of 10 percent to 7.05 yuan (US$1.04), and China Railway Group rose 3 percent to 9.01 yuan.

However, the fund firm warned: “Market sentiment is still worried by the upcoming unlocking of non-tradable shares in November and December, risks arising from housing curbs on economic growth and the yuan depreciation.”

The People’s Bank of China yesterday set the central parity rate of the yuan at 6.7558 against the US dollar, or down 247 basis points, to hit the lowest in six years.

Property developers were mixed after official data showed yesterday that China’s red-hot housing market began to cool last month, with new home prices rising in 63 of 70 cities in September, down from 64 in August.

Cinda Real Estate Co added 2.2 percent to 7.52 yuan. Wolong Real Estate Group Co dropped 2.2 percent to 8.82 yuan.


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