Shares rise as rumors of stimulus lift confidence
By Ye Zhen |
July 20, 2012, Friday
|
Print Edition
Print Edition
SHANGHAI shares yesterday advanced for a third straight day amid speculation the government may soon take steps to support economic growth.
The Shanghai Composite Index posted its biggest gain in two weeks, rising 0.73 percent to 2,184.84 points.
The State Council, China's Cabinet, is likely to meet this week to review the economic situation in the first half of this year and discuss stimulus measures for the second half. Analysts said the meeting may shed some light on policy direction in following months.
"The government may use measures other than interest rates to boost the economy," said Wei Wei, an analyst at West China Securities Co. "There are some company earnings that are quite bad."
Shenyin and Wanguo Securities said it expects the government will unveil financial incentives and tax cuts in an effort to boost investor confidence.
The Shanghai Composite Index has fallen 11 percent from this year's high recorded on March 2.
The State Council usually holds the meeting one or two weeks after the release of first-half economic data.
Insurers surged yesterday after the nation's insurance regulator said new policies will be unveiled soon to loosen investment restrictions on insurance funds.
"The new policies will help insurers increase returns on investment in the long term," said Jiao Wenchao, an analyst at China Securities Research. Jiao said the return on insurance funds investment will likely advance to between 6 and 7 percent after the implementation of the policies.
China Life Insurance, the country's biggest insurer, jumped 5.6 percent to 20 yuan (US$3.14). Ping An Insurance Co gained 3.7 percent to 45.95 yuan. China Pacific Insurance (Group) Co climbed 4.5 percent to 23.64 yuan.
The Shanghai Composite Index posted its biggest gain in two weeks, rising 0.73 percent to 2,184.84 points.
The State Council, China's Cabinet, is likely to meet this week to review the economic situation in the first half of this year and discuss stimulus measures for the second half. Analysts said the meeting may shed some light on policy direction in following months.
"The government may use measures other than interest rates to boost the economy," said Wei Wei, an analyst at West China Securities Co. "There are some company earnings that are quite bad."
Shenyin and Wanguo Securities said it expects the government will unveil financial incentives and tax cuts in an effort to boost investor confidence.
The Shanghai Composite Index has fallen 11 percent from this year's high recorded on March 2.
The State Council usually holds the meeting one or two weeks after the release of first-half economic data.
Insurers surged yesterday after the nation's insurance regulator said new policies will be unveiled soon to loosen investment restrictions on insurance funds.
"The new policies will help insurers increase returns on investment in the long term," said Jiao Wenchao, an analyst at China Securities Research. Jiao said the return on insurance funds investment will likely advance to between 6 and 7 percent after the implementation of the policies.
China Life Insurance, the country's biggest insurer, jumped 5.6 percent to 20 yuan (US$3.14). Ping An Insurance Co gained 3.7 percent to 45.95 yuan. China Pacific Insurance (Group) Co climbed 4.5 percent to 23.64 yuan.
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