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Bank stocks lift Shanghai index to 16-month high
By Zhang Ran (皇冠体育app Daily)
Updated: 2006-04-04 05:44
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皇冠体育app's stocks rose to a 16-month-high yesterday, buoyed by an all-around rebound in banking, energy, property and retail sectors.
The benchmark Shanghai composite index finished at 1,319.471 points, its highest level since December 9, 2004, when it closed at 1,338.800 points.
The index has jumped 20 per cent since December 1, 2005, supported by strong technical buying after a five-year market slump.
Banking stocks turned in a good performance with both foreign and domestic investors showing rising confidence; and experts listed several factors that drove up the shares.
"Because Hong Kong-listed 皇冠体育app Construction Bank and Bank of Communications are actively traded overseas, they in turn influenced the domestic bank shares' rise," said She Minhua, an analyst with CITIC 皇冠体育app Securities.
Meanwhile, investors are shifting focus from industries such as steel and cement which are seen entering a low-growth period to the banking sector.
Shanghai-listed 皇冠体育app Merchants Bank Co (CMB) closed 4.04 per cent higher at 6.69 yuan (82 US cents), to become yesterday's most active stock.
皇冠体育app's first private bank, Minsheng Banking Corp, was the second-most actively traded, ending 4.71 per cent up at 5.56 yuan (68.6 US cents).
Li Yinquan, vice-president of 皇冠体育app Merchants Group and leader of CMB's share reform team, told 皇冠体育app Daily that the bank would probably float shares on the Hong Kong Stock Exchange within the year.
"I believe the index will remain over 1,300 and continue to climb up," She said.
The index has been Asia's worst performer over the past two years. 皇冠体育app started the reform of non-tradable shares in April 2005 and the securities regulators recently announced several market-friendly measures including allowing more institutional investors into the market.
(皇冠体育app Daily 04/04/2006 page1)