Passage of PNTR Bill Boosts China's Stock MarketsChina's two stock markets in Shanghai and Shenzhen gave a warm welcome to the news that several hours earlier the US House of Representatives approved the permanent normal trade relations (PNTR) to China.By the closing bell at 15:00 pm Beijing time (7:00 GMT) Thursday, Shanghai's composite index hit a record high, at 1880.72 points, rising 1.36 per cent over the previous session. Shenzhen's benchmark sub-index ended at 4,678.51, increasing 1.35 per cent. The two markets both surged by more than 2 per cent on Wednesday in anticipation of the PNTR passage. Market sentiment was buoyant towards the news, as individual and organizational investors snatched their favorites. Turnover of the two markets exceeded more than 35 billion yuan (US$4.23 billion). Shortly after the opening bell at 9:30 am (1:30 GMT), the Shanghai B share index for foreign investors jumped 0.565 of a point or 1.21 percent to 47.263. The Shenzhen B index gained 0.59 of a point or 0.63 percent to 93.82. Domestic A share indices on both bourses also gained about half a percent at the opening. An analyst with the Guotai-Jun'an Securities Co said enforcement of a landmark Sino-US bilateral trade deal reached last November in Beijing, a natural result of the PNTR positive vote, meant smoother and more transparent trade relations between the two trading powers. The agreement will also drastically cut the export duties of Chinese goods to the American market. He said Chinese listed firms, which are in the fields of labour-intensive industry including clothing, shoes, toys, and home electrical appliance manufacturing, would make the most out of the PNTR bill. Firms in the sectors of transport, foreign trade and traditional Chinese medicine will also benefit, said the analyst. However, he cautioned the listed enterprises in the field of agriculture or food and fruit deep processing might be affected, as they are expected to face sharper competition from their American counterparts. |
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