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Shanghai market gains after rebound

SHANGHAI'S key stock index edged up yesterday to close above 2,600 points after a rebound of heavyweight firms in the second half of the day's trading.

The benchmark Shanghai Composite Index edged up 0.48 percent, or 12.41 points, to close at 2,610.01. Turnover was 112.7 billion yuan (US$16.5 billion).

China has unveiled a new pricing mechanism that favors minority investors who buy into IPOs, paving the way for the resumption of new stock sales on the mainland after a nine-month hiatus.

A total of 32 companies have received approval from the China Securities Regulatory Commission and more than 14.3 billion shares will be sold after IPOs are restarted.

"The index may go through fluctuations with the resumption of IPOs but in the long run we think the market will keep its upward trend," said a research note by Zhongyuan Securities.

PetroChina announced over the weekend that it has signed an agreement to buy a 45.51 percent stake in Singapore Petroleum Co for US$1.02 billion in cash. PetroChina, the largest index component, rose 1.87 percent to 13.1 yuan. China Petroleum & Chemical Corp, Asia's largest refiner and also known as Sinopec, was up 0.59 percent at 10.30 yuan.

Banks had mixed results. Shanghai Pudong Development Bank edged up 0.32 percent to 24.88 yuan. China Merchants Bank Co, the nation's fifth-largest bank by market value, was down 0.3 percent to 16.6 yuan. Bank of Communications retreated 1.42 percent to 6.95 yuan.


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