Latest News:  


Bourse gets lift from policy on funds investment

By Huang Tiantian  (China Daily)

10:21, February 28, 2013

Property firms lead gains in Shanghai

Chinese mainland shares closed up 0.87 percent on Wednesday after getting a lift from hopes the authorities will allow more government funds to be invested in the stock market, dealers said.

The benchmark Shanghai Composite Index rose 19.88 points to 2,313.22, the most since February, on turnover of 88.3 billion yuan ($14.2 billion).

The index rose in response to reports that China has started preparation work for allowing housing provident funds - which are managed by the government and used to help people buy homes - to be invested in the stock market.

Minsheng Securities analyst Zhang Lei said: "The market is benefiting from upbeat sentiment (from that report)."

Property developers led the gains. Shanghai Xinmei Real Estate jumped 6.87 percent to 11.36 yuan, Gemdale gained 4.02 percent to 6.99 yuan and Poly Real Estate rose 3.86 percent to 12.38 yuan.

Meanwhile, the depreciation of the Japanese yen and the economic recovery in the United States are likely to bring more uncertainties to China's stock markets, analysts said.

It will divert capital from Chinese stocks, on the one hand, hitting the country's exporters. On the other hand, importers will be helped by increasing overseas demand and cheaper prices for products from abroad, given the strength of the yuan.

The deprecation has affected Japan's stock market since the end of last year, which had increased nearly 30 percent since Nov 13.

Moreover, the economic recovery in United States is picking up speed. According to US government statistics, economic readings on consumer confidence, the retail sector and employment all improved in January.

The Dow Jones Industrial Average has increased 6 percent since Dec 31. It closed at 13,900.13 on Tuesday, up 0.86 percent, while the mainly tech-driven Nasdaq composite climbed 0.43 percent the same day.

"The continual depreciation of the yen will challenge China's export-related industries. Some Chinese companies whose main activities are based on exports will be affected, especially in the mechanical and electrical industry, and in shipbuilding," said Xiang Songzuo, chief economist at Agricultural Bank of China.

According to Peng Wensheng, chief economist at China International Capital Corp, a 20-percent depreciation of the Japanese yen against the yuan could lead to a 2.5 percent drop in China's exports.

On the positive side, China's importers could gain significantly.

"The depreciation of the yen will benefit those Chinese companies whose main business is importing Japanese products, such as automobiles, or products in the precision instrument and telecom industries," added Xiang Weida, director of research at Great Wall Securities Co Ltd.

Xiang added: "The renminbi will depreciate against the dollar, but compared to other foreign currencies like the euro, pound and Japanese yen, the renminbi remains strong."

Also on Wednesday, the Shenzhen Component Index increased 1.36 percent, while the Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong gained 0.4 percent.

China's securities companies climbed 3.65 percent after China Securities Regulatory Commission said it may allow more securities companies to conduct asset-backed securities business. China Merchants Securities soared 8.43 percent on the news, the biggest increase by a securities company.

We recommend:

IKEA: Meatballs in China supplied by Fujian factory

Jet-set life takes off for country's super-rich

Taking a bite out of the market for snakes

Ratings agency warns about rising debt

Holiday firework sales fail to boom

4G network to lead the world

Email|Print|Comments(Editor:MaXi、Liang Jun)

Leave your comment0 comments

  1. Name


Selections for you

  1. An advanced military training base

  2. Chinese Navy's type-056 frigate

  3. Egypt's balloon explosion kills 19

  4. West debates China's 'leftover women'

  5. Kissing competition in collective wedding

  6. Community's fire, folk carnival in China

  7. Too much of a good thing

  8. The crazy things that you never saw

  9. Easier entry to grid may charge

  10. Media Markt to shut down all city stores

Most Popular


  1. China reserves right to appeal WTO ruling
  2. SOEs must act to avoid PR disaster
  3. Mainland hails Lien Chan's visit
  4. Party mulls personnel, govt reshuffles
  5. China must brace for impact of possible EU-US FTA
  6. Peaceful development important in cross-Straits ties
  7. "China threat" theory still exists despite Nexen deal
  8. Cross-Straits relations 'will be boosted'
  9. China 'firmly supports' BRICS
  10. Water quality a concern

What’s happening in China

Public letter calls for gay marriage legislation

  1. Suspect dies following S China bombing
  2. Frugality, anti-corruption affects luxury brands
  3. Regulation to stop production of 'gutter oil'
  4. 225 websites closed for spreading porn
  5. New food scare as report says tainted rice sold