Key index rises on PBOC's note issue
By Feng Jianmin |
August 5, 2011, Friday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday rose for the first time in three days after China's central bank pumped more cash into the country's economy.
The Shanghai Composite Index edged up 0.2 percent to end at 2,684.04 points.
The People's Bank of China issued 1 billion yuan (US$155 million) worth of three-month notes yesterday following its issue of 1 billion yuan one-year notes on Tuesday. A total of 46 billion yuan in these securities are due to mature by the end of this week. This indicated that the PBOC will have pumped a net 44 billion yuan into the economy this week, the most since the week ended July 1.
"We expect that the central bank will issue most of the notes in the middle of this month," said Xu Chengjie, an analyst at China Fortune Securities. "We think the central bank will slow the frequency at which it will increase reserve requirements for banks because less capital will mature in the second half of this year, and the central bank can absorb liquidity through open market operations."
Wu Xianxing, an analyst at Haitong Securities, said the market's rise may be limited by concerns over a slowdown of the Chinese economy and tight monetary policies. But he expects the market to gain in the fourth quarter.
Cement firms led gainers yesterday after data from the Ministry of Industry and Information Technology showed they made a profit of 35.2 billion yuan in the first five months of this year, an annual surge of 170 percent. Anhui Conch Cement Co, China's biggest cement maker, rose 2.6 percent to 26.19 yuan.
The Shanghai Composite Index edged up 0.2 percent to end at 2,684.04 points.
The People's Bank of China issued 1 billion yuan (US$155 million) worth of three-month notes yesterday following its issue of 1 billion yuan one-year notes on Tuesday. A total of 46 billion yuan in these securities are due to mature by the end of this week. This indicated that the PBOC will have pumped a net 44 billion yuan into the economy this week, the most since the week ended July 1.
"We expect that the central bank will issue most of the notes in the middle of this month," said Xu Chengjie, an analyst at China Fortune Securities. "We think the central bank will slow the frequency at which it will increase reserve requirements for banks because less capital will mature in the second half of this year, and the central bank can absorb liquidity through open market operations."
Wu Xianxing, an analyst at Haitong Securities, said the market's rise may be limited by concerns over a slowdown of the Chinese economy and tight monetary policies. But he expects the market to gain in the fourth quarter.
Cement firms led gainers yesterday after data from the Ministry of Industry and Information Technology showed they made a profit of 35.2 billion yuan in the first five months of this year, an annual surge of 170 percent. Anhui Conch Cement Co, China's biggest cement maker, rose 2.6 percent to 26.19 yuan.
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