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Shanghai shares up on stronger business index
By Feng Jianmin |
July 8, 2011, Friday
|
Online Edition
Online Edition
SHANGHAI'S key stock index edged up today after a business index showed that the macro environment and company performances in China are improving in the second quarter.
The benchmark Shanghai Composite Index rose 0.13 percent to 2,797.77 points. Turnover fell to 103.6 billion yuan (U$16 billion) from yesterday's 141.3 billion yuan.
The index was up 1.4 percent this week on speculation that the government may loosen its monetary policies after a widely-expected inflation peak in June.
China's top statistics bureau said today that a national Business Climate Index rose to 135.6 points in the second quarter, 1.8 points higher than the first quarter. BCI for information transmission and software sectors are the fastest growers while the oil refiners, while that for nuclear material processors and transportation firms fell from the previous quarter, according to a report on the bureau's website.
Banks led the gainers after China International Capital Corp said Moody's has overstated the size of possible bad local government loans by quoting improper sources in a report released on July 5. The Moody's estimated that China's local government loans is 12 trillion yuan and the local governments may be unable to pay back 20 to 33 percent of the loans but CICC estimated that the bad loan ratio can be controlled at less than 10 percent, according to the report.
The report said that the valuation for yuan-denominated A-shares are low and worth investing. It added that speculation for looser monetary policies and strong semi-annual report may support a growth of banks, but tighter regulation on financial products and capital sufficiency will limit the gains.
China Merchants Bank rose 1.5 percent to 13.43 yuan. Industrial and Commercial Bank of China grew 0.7 percent to 4.34 yuan.
Car makers dropped from previous gains. SAIC Motor fell 1.3 percent to 18.32 yuan. Anhui Jianghuai Automobile Co lost 1.2 percent to 10.98 yuan.
The benchmark Shanghai Composite Index rose 0.13 percent to 2,797.77 points. Turnover fell to 103.6 billion yuan (U$16 billion) from yesterday's 141.3 billion yuan.
The index was up 1.4 percent this week on speculation that the government may loosen its monetary policies after a widely-expected inflation peak in June.
China's top statistics bureau said today that a national Business Climate Index rose to 135.6 points in the second quarter, 1.8 points higher than the first quarter. BCI for information transmission and software sectors are the fastest growers while the oil refiners, while that for nuclear material processors and transportation firms fell from the previous quarter, according to a report on the bureau's website.
Banks led the gainers after China International Capital Corp said Moody's has overstated the size of possible bad local government loans by quoting improper sources in a report released on July 5. The Moody's estimated that China's local government loans is 12 trillion yuan and the local governments may be unable to pay back 20 to 33 percent of the loans but CICC estimated that the bad loan ratio can be controlled at less than 10 percent, according to the report.
The report said that the valuation for yuan-denominated A-shares are low and worth investing. It added that speculation for looser monetary policies and strong semi-annual report may support a growth of banks, but tighter regulation on financial products and capital sufficiency will limit the gains.
China Merchants Bank rose 1.5 percent to 13.43 yuan. Industrial and Commercial Bank of China grew 0.7 percent to 4.34 yuan.
Car makers dropped from previous gains. SAIC Motor fell 1.3 percent to 18.32 yuan. Anhui Jianghuai Automobile Co lost 1.2 percent to 10.98 yuan.
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