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November 17, 2009

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Shanghai shares bound after positive calls on GDP, inflation

SHANGHAI'S share market rallied to its highest level in three months yesterday, with energy companies and coal producers leading the way.

The bullish performance followed a government think-tank's reassurance that China's gross domestic product growth would be above 8 percent this year.

The benchmark Shanghai Composite Index jumped 2.74 percent, or 87.40 points, to close at 3,275.05 points.

Turnover rose to 228 billion yuan (US$33.4 billion) from 165.5 billion yuan last Friday.

Gains outnumbered losses 787 to 69 and 56 remained unchanged.

The State Information Center said in a report yesterday that China's economy was expected to grow 8.5 percent this - above the government target of 8 per cent - and predicted inflation would be about 2.5 percent.

The energy sector rose in Shanghai amid expectations that United States President Barack Obama's visit to China may boost energy cooperation between the two countries.

Zhejiang Feida Environmental Science and Technology Co surged the 10 percent daily limit to 15.90 yuan. Shanxi Lu'an Environmental Energy Development was also up 10 percent to 50.64 yuan.

"The market will remain strong in the next few days as expectations of the yuan's appreciation attract more capital to the market," Guosen Securities wrote in a research report.

Recent heavy snowstorms in northern China are expected to boost demand for coal and fuel.

Zhengzhou Coal Industry and Electric Power Co surged 10 percent to 13.07 yuan.

Inner Mongolia Pinzhuang Energy Co advanced 7.03 percent to 14.46 yuan and Datong Coal Industry rallied 10 percent to 47.61 yuan.

Metal producers also lifted after the price of gold rose 0.7 percent to US$1,126.07 an ounce.

Zijin Mining Co jumped 2.38 percent to 9.88 yuan and Shandong Gold Mining Co 2.72 percent to 75.27 yuan.

Zhongjin Gold Co advanced 2.16 percent to 60.85 yuan and Yunnan Copper Co surged 6.44 percent to 33.22 yuan.

Property developers and banking shares rallied after Jiang Dingzhi, vice director of the China Banking Regulatory Commission, said over the weekend that there would not be a shift in policy for second-hand home loans.

China Vanke Co, the biggest listed domestic real estate developer, jumped 2.96 percent to 12.16 yuan.

Gemdale Corporation rose 4.12 percent to 16.43 yuan and Shanghai Lujiazui Finance and Trade Zone Development Co Ltd edged up 1.63 percent to 29.37 yuan.

The Industrial and Commercial Bank of China, the nation's biggest lender, rose 2.63 percent to 5.47 yuan.

Shanghai Pudong Development Bank added 2.52 percent to 24.01 yuan and China Construction Bank was up 2.50 percent to close at 6.14 yuan.


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