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Shares surge 6.1% on hopes of new measures

By Pan Xiaoyi | March 5, 2009, Thursday | Print Edition

SHANGHAI'S key stock index soared over 6 percent yesterday with almost all shares rising on signs of an early recovery and hopes of new positive measures during the country's annual meeting of law makers and advisory body.

The Shanghai Composite Index surged 6.12 percent, or 126.68 points, to 2,198.11. It is the biggest gain in almost four months since shares jumped 7.27 percent to end at 1,874.8 on November 10, 2008.

Out of the total of 889 companies on the local bourse, only one declined while the rest advanced. Turnover swelled to 127.9 billion yuan (US$18.81 billion), from 79.9 billion yuan on Tuesday.

"New lending in February is expected to beat market expectations, which raised investor confidence. The Purchasing Manager's Index continued to rise last month, a sign of an early economic recovery," Guotai Jun'an Securities Co wrote in a research note.

The PMI rose to 49 in February from 45.3 in January, the China Federation of Logistics and Purchasing said yesterday. A reading below 50 indicates a contraction. Output and new orders expanded for the first time in five months.

Meanwhile, Shanghai Securities News reported yesterday that new loans last month are expected to reach as much as 1 trillion yuan after hitting a record 1.62 trillion yuan in January.

"Institutional investors poured in the market on increasing expectations of favorable measures to be announced during the annual meeting" of the country's top advisory body and the national parliament, GF Huafu Securities Co wrote in a note. The advisory body began its meeting on Tuesday and the National People's Congress opens today.

"New stimulus packages are to be unveiled in the near future to reverse the nation's economic slide," said Li Yizhong, minister of Industry and Information Technology.

Gemdale Corp, a Chinese partner of ING Group NV, jumped by 10 percent daily cap to 8.93 yuan. Poly Real Estate Group Co, China's second-largest developer by market value, climbed 8.92 percent to 19.91 yuan. China Vanke co, the country's largest publicly listed property developer, added 6.47 percent to 7.9 yuan and Shanghai-based Shimao Property Co gained 5.3 percent to 8.74 yuan.

Aluminum Corp of China gained 8.96 percent to 9.61 yuan. Jiangxi Copper Co rose by 10 percent to 16.73 yuan.

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