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Shanghai index up again, helped by strong loan data

SHANGHAI stocks advanced for a third straight day today after data showed Chinese banks issued more loans last month as the government steps up effort to spur economic growth.

The benchmark Shanghai Composite Index added 0.18 percent, or 3.71 points, to 2,070.36. Turnover was 102.9 billion yuan (US$16.6 billion).

Chinese banks extended 1.08 trillion yuan of new loans in June, up from 870.8 billion in May and beating market expectations, the People’s Bank of China said today.

M2, a broad measure of money supply, rose 14.7 percent year on year last month, the highest in 10 months, data showed.

“Higher-than-expected lending is a result of policy easing by the government and is good for short-term growth,” analysts at Gaohua Securities said in a note today.

China has rolled out a raft of mini stimulus, including targeted monetary easing and more fiscal spending, to bolster a flagging economy.

The market gain was capped by anticipation of new stocks that may divert funds from existing shares. China Securities Regulatory Commission said yesterday it has approved 12 initial public offerings, six on Shanghai Stock Exchange and six on Shenzhen bourse.

The state-owned medical distributor China Meheco jumped 5 percent to 11.96 yuan after the company was selected to pilot the reform of state-owned enterprises. Jihua Group, which is also on the list of SOEs for the trial, gained 7 percent to 2.76 yuan.

Producers of electric-car charging equipment continued a strong run on the government’s plan to boost the use of new-energy vehicles. Beijing Dynamic Power rose 5 percent to 15.69 yuan.


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