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Shanghai index rises 1%, boosted by banks, developers
By Hu Xiaocen |
January 20, 2012, Friday
|
Online Edition
Online Edition
SHANGHAI stocks rallied on the last trading day before the Year of the Dragon as the country's credit crunch was eased with liquidity infusion by the central bank.
The Shanghai Composite Index jumped 1 percent to 2,319.12 points at the close of trading, the highest in six weeks and a second gain of 5.1 percent in the week.
The index climbed on the rally of bankers and property developers today, said Tong Bin, chief analyst at Hua'an Securities.
Shanghai market tumbled 22 percent in 2011 as the worst performer among major global capital markets.
New loans totaling 110 billion yuan (US$17.5 billion) were released by the nation's four biggest banks so far this month, according to industry insiders. The total amount of new loans in January is expected to reach 1 trillion yuan, the China Securities Journal reported.
HSBC Holdings released its preliminary reading of China's Purchasing Managers Index in January. A reading of 48.8 indicates the country's manufacturing sector continued to contract three months in a row. A figure above 50 means expansion.
Qu Hongbin, chief economist for China at HSBC, projected for more easing of the monetary policy to stabilize economic growth.
The central bank injected 183 billion yuan into the capital market by repurchasing bills from banks yesterday, according to its website announcement.
The State Council, China's cabinet, is working on a proposal to allow local governments to invest 10 to 20 percent of their pension funds in the stock market. The total amount of available capital could reach 360 billion yuan, Sina News reported.
"Shanghai stocks rallied because the central bank boosted liquidity and local pension funds are allowed to buy stocks," said Zhao Wei, analyst at Huaxin Securities. "However, a slow turnover indicates market fluctuations."
Tong Ming, analyst at First Financial, held a rather different view. "Pension funds cannot save the stock market from its tumble due to their limited amount as compared with the size of the total capital market," he said. Tong also expected more liquidity infusion after the holiday.
Banks jumped 2.71 percent on average. China Merchants Bank gained 2.36 percent to 13 yuan. China Citic Bank rose 1.84 percent to 4.44 yuan. Agricultural Bank of China edged up 0.74 percent to 2.72 yuan.
The Shanghai Composite Index jumped 1 percent to 2,319.12 points at the close of trading, the highest in six weeks and a second gain of 5.1 percent in the week.
The index climbed on the rally of bankers and property developers today, said Tong Bin, chief analyst at Hua'an Securities.
Shanghai market tumbled 22 percent in 2011 as the worst performer among major global capital markets.
New loans totaling 110 billion yuan (US$17.5 billion) were released by the nation's four biggest banks so far this month, according to industry insiders. The total amount of new loans in January is expected to reach 1 trillion yuan, the China Securities Journal reported.
HSBC Holdings released its preliminary reading of China's Purchasing Managers Index in January. A reading of 48.8 indicates the country's manufacturing sector continued to contract three months in a row. A figure above 50 means expansion.
Qu Hongbin, chief economist for China at HSBC, projected for more easing of the monetary policy to stabilize economic growth.
The central bank injected 183 billion yuan into the capital market by repurchasing bills from banks yesterday, according to its website announcement.
The State Council, China's cabinet, is working on a proposal to allow local governments to invest 10 to 20 percent of their pension funds in the stock market. The total amount of available capital could reach 360 billion yuan, Sina News reported.
"Shanghai stocks rallied because the central bank boosted liquidity and local pension funds are allowed to buy stocks," said Zhao Wei, analyst at Huaxin Securities. "However, a slow turnover indicates market fluctuations."
Tong Ming, analyst at First Financial, held a rather different view. "Pension funds cannot save the stock market from its tumble due to their limited amount as compared with the size of the total capital market," he said. Tong also expected more liquidity infusion after the holiday.
Banks jumped 2.71 percent on average. China Merchants Bank gained 2.36 percent to 13 yuan. China Citic Bank rose 1.84 percent to 4.44 yuan. Agricultural Bank of China edged up 0.74 percent to 2.72 yuan.
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