Faster inflow of foreign funds helps lift key index

SHANGHAI stocks yesterday inched up for a second day after data showed faster capital inflows in January.

The Shanghai Composite Index added 0.9 percent to 2,347.18 points.

The People's Bank of China and commercial banks bought a record net 683.7 billion yuan (US$110.3 billion) in foreign currency in January, beating the annual amount of 494.6 billion yuan in 2012, according to data released by the central bank. It indicated large inflows amid signals of recovery in the world's second-largest economy.

"Improving expectations among enterprises and households contributed to the continuous increase of foreign exchange purchases as the worst is over for China's economy," Essence Securities said in a report yesterday. "Meanwhile, capital inflows also increased due to abundant liquidity resulting from loose monetary policies around the world."

Most property developers gained on speculation they have been oversold after a gauge tracking the performance of listed developers plunged 7.6 percent on Monday. A Shenyin and Wanguo Securities report said the price-to-earnings ratio of the bellwether listed developers has fallen to a record low of less than eight times.

Poly Real Estate, China's second-largest listed developer, rose 0.9 percent to 11.35 yuan.

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