Shares jump on booming SOE profit, stimulus sign
Print Edition
CHINESE stocks rose yesterday on news revenue and profits of state-owned enterprises grew steadily in the first six months and stronger-then-expected industrial growth.
The rally also came after the State Council said on Monday that China will better utilize its fiscal and financial policies to support the expansion of domestic demand, structural adjustment and boost the development of the real economy.
The benchmark Shanghai Composite Index closed 1.61 percent higher at 2,905.56. The Shenzhen Composite Index gained 1.51 percent to 1,625.84. Infrastructure firms, consumer enterprises and iron and steel providers were among the biggest gainers.
The Ministry of Finance said state-owned enterprises recorded profits of 1.72 trillion yuan (US$252.2 billion) in the first half, a rise of 21.1 percent year on year. Total revenue increased 10.2 percent to about 27.8 trillion yuan, the ministry said.
“State-owned enterprises in iron and steel, non-ferrous metals, oil and petrochemicals posted sharp increases in terms of profits,” the ministry said.
Sentiment also rose after the Ministry of Industry and Information Technology said yesterday that China’s industrial added-value maintained steady growth, up 6.7 percent year on year for the first half, fuelled by supply-side reforms and industrial upgrading.
Over the same period, production and business conditions in the cement, glass and chemical industries also greatly improved, the ministry said.
“Domestic investors have chased back consumer stocks on low risk appetite,” said Gao Ting, head of China Strategy at UBS Securities.
“We broadly maintain our preference for tourism and food and beverage on more steady fundamentals.”
Anhui Yingjia Distillery Co Ltd jumped 8.41 percent to 19.33 yuan, Anhui Conch Cement Co Ltd rose 6.84 percent to 38.40 yuan and Zijin Mining Group Co Ltd climbed 4.69 percent to 3.57 yuan.
China will take measures to promote effective investment focusing on addressing inadequacies, gathering more momentum and improving people’s livelihood, according to the State Council’s executive meeting chaired by Premier Li Keqiang on Monday.
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