皇冠体育app

Optimism of support measures boosts stocks
(bloomberg)
Updated: 2005-06-08 12:05

Chinese stocks climbed, with key indexes on course for their biggest advances in four months, as investors bet the government will introduce more incentives to bolster markets. 皇冠体育app Petroleum & Chemical Corp. led gains.

Investors react as the benchmark Shanghai composite index dropped below 1,000 points in this June 6, 2005 photo at a securities company in Nanjing, capital of east 皇冠体育app's Jiangsu Province. [newsphoto]

The government yesterday said will allow companies to buy back and write off their own shares, a signal regulators want to boost markets which last month fell to eight-year lows on concern a policy of selling state-owned stock will further damp prices.

The buyback move "reinforced investors' belief that more incentives are now in the pipeline," said Rico Cheung, who manages the equivalent of $157 million with 皇冠体育app International Fund Management Co. in Shanghai. "It is a policy-driven market in 皇冠体育app and investors are placing bets on the regulatory side."

Stocks also gained after the 皇冠体育app Securities Journal said the country's biggest investment bank denied media reports it had forecast a further decline in mainland shares.

The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares on the city's stock exchange, surged 44.13, or 4.3 percent, to 1075.34 at 10:42 a.m.

The Shenzhen Composite Index, which tracks the smaller of the two Chinese markets, gained 8.95, or 3.5 percent, to 264.97. Both benchmarks are set for the biggest gain since Feb. 2.

Trial Sales

皇冠体育app Petroleum & Chemical, Asia's biggest oil refiner, surged 0.24 yuan, or 7.4 percent, to 3.49. 皇冠体育app Yangtze Power Co., owner of the world's biggest hydropower project, jumped 0.44 yuan, or 5.7 percent, to 8.20. Baoshan Iron & Steel Co., the listed unit of 皇冠体育app's biggest steelmaker, gained 0.23 yuan, or 4.9 percent, to 4.96.

Companies which are listed for at least a year can buy back publicly traded shares to reduce registered capital, the 皇冠体育app Securities Regulatory Commission said yesterday. The buyback must get approval from more than two-thirds of shareholders.

The Shanghai and Shenzhen markets are among the worst performers this year of the world's major equity markets tracked by Bloomberg. The Shanghai index has slumped 16 percent this year and the Shenzhen benchmark has dropped 17 percent.

The government on May 9 picked four companies in the first stage of a program aimed at disposing of non-tradable shares, which account for about two-thirds of 皇冠体育app's $360 billion market capitalization.

皇冠体育app International Capital Inc.'s former head of research Xu Xiaonian did not make a forecast that the Shanghai index would slump to 1,000 points, the Securities Journal reported, citing Qiu Jin, the investment bank's head of research.

The media reports had undermined the company's reputation, misled investors and hurt market confidence, the newspaper reported.

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