Latest News:  


Share prices up on hopes of monetary easing

By Xie Yu in Shanghai  (China Daily)

10:54, July 12, 2013

Share prices rebounded sharply on Thursday as investors expect an easing of policies to tackle worsening economic trends in China.

The benchmark Shanghai Composite Index shot up 3.23 percent, the biggest one-day gain in seven months, closing at 2072.99. Turnover also soared to 131 billion yuan ($21.4 billion), from 72.8 billion yuan on Wednesday.

Leading the charge were banks, brokerages, real estate developers and construction material suppliers.

The rally came on the heels of the announcement of poor trade figures, suggesting a decline in exports could lead to bigger economic problems, including a rise in unemployment.

Some analysts are taking the view the government will adopt a more expansionary monetary policy to ensure a smooth economic landing.

Their expectation was reinforced by a comment from Premier Li Keqiang. Xinhua News Agency quoted Li as saying that China will make sure economic activity moves within a reasonable range, while inflation should be kept below a ceiling.

"It sounds to me that the central government is going to loosen monetary policy. Now that the export data is so poor, China may have no choice but to rely on domestic investment, including property development, to boost the economy," said Eason Lu, a senior analyst with a Shanghai-based private fund.

A fall in trade growth in June caused surprise. Export growth fell by 3.1 percent from 1 percent in May, the first negative growth in 17 months, while import growth dropped by 0.7 percent year-on-year in June from 0.3 percent in May.

In addition to sluggish global demand, yuan appreciation and a liquidity squeeze in the second half of June, another factor behind the downturn may have been caused by Chinese traders unwinding fake trading as the government tightens up its control of hot money inflows and arbitrage, Merrill Lynch said in a report on Thursday.

"I never feel worried no matter how harsh the curbing policies are. I am fully convinced under the current circumstances, investment especially in real estate development, is still the most direct way of boosting the economy," said Gary Wang, who works for a mid-sized real estate consultancy in Shanghai.

The China Securities Journal reported on Thursday that authorities may, under certain conditions, relax the rules on financing for listed property developers. The Shanghai-listed Poly Real Estate saw its share price surge by 6.09 percent to 11.32 yuan on Thursday.

Li Daxiao, head of the research department at Yingda Securities, said the rebound represents a successful rescue by the government.

The market will still fluctuate in the future, with the bottom slowly climbing, he added.

We Recommend:

How did Chinese solar industry go bankrupt?

Born to lead: 2nd gen of Chinese tycoons

Chinese graduates’ unconventional jobs

China's largest railway terminal officially opens

Dazzling gems shine at Beijing jewelry show

Boeing 787 Dreamliner to serve Beijing-Haikou route

New high-speed rail linking Nanjing, Ningbo opens

Jiaxing-Shaoxing Sea Bridge in E China

Chinese investors' happiness and sadness

Email|Print|Comments(Editor:WangXin、Chen Lidan)

Leave your comment0 comments

  1. Name


Selections for you

  1. Chinese, Russian naval forces in drill

  2. Naval joint exercise to be normalized

  3. Muslims buy food to break daytime fast

  4. Working people under the sweltering sun

  5. Lonely summer for migrant kids

  6. Rainstorms flood more than 10,000 cars

  7. Shining WTCC grid girls

  8. Snapshots of Kazan Universiade

  9. 2013 China Int'l Boat Show kicks off

  10. A decade for home mortgage slaves

Most Popular


  1. High hopes for high-tech export reform
  2. China's automobile organization slams car limits
  3. Shortage of teachers hurts kindergartens
  4. Building on past successes
  5. Inflow of 'hot money' tackled, expert says
  6. Caution urged in seeking experts from abroad
  7. China didn't cause German solar firms' bankruptcy
  8. China, U.S. discuss cyber security
  9. Why are we obsessed with selfies?
  10. Israel keen on luring Chinese tourists

What’s happening in China

China's Chongqing issues orange-coded alert of heat

  1. Books on dating become a hit 24 years later
  2. Now a smartphone app for free contraceptives
  3. Gang rape suspect gets new lawyers
  4. Life expectancy for Beijing residents increases
  5. Tourists cool off on beach in Shanghai