Lenders and machinery makers extend rally
Mainland blue chips closed higher yesterday, extending gains with stocks of banks and machinery manufacturers in demand as the market hit fresh 26-month highs.
Two more overseas institutions - Morgan Stanley Investment Management and Prudential Asset Management (Hong Kong) - were allowed to buy yuan-denominated securities, fuelling expectation foreign investment would rise.
The two firms had been granted licences for equity investments, the China Securities Regulatory Commission said yesterday.
'That's good news, because it means that more liquidity will be added to the market,' said Haitong Securities analyst Zhang Qi.
Dealers said further support came as recently listed Bank of China attracted fresh interest and from the announcement of strong interim results that belied concerns overcapacity in the economy could undercut profit margins.
Zhengzhou Yutong Coach Manufacturing led some of the biggest companies higher.
Steelmakers such as Angang New Steel slid after a report showed steel prices fell in the past three weeks.
The Shanghai A-Share Index rose 11.93 points to 1,835.75 on turnover of 24.24 billion yuan and the Shenzhen A-Share Index gained 2.79 points at 465.68 on turnover of 16.36 billion yuan.
The Shanghai B-Share Index rose 1.35 points to 94.48 on turnover of US$16.35 million and the Shenzhen B-share Index was up 0.02 point at 295.67 points on $143.8 million.
'The market was helped by late afternoon bargain hunting in Bank of China, which has been correcting since its debut,' said Liu Jingde, an analyst at Beijing Securities.
Dealers said a strong yuan and positive expectations of good interim results would continue to push prices higher.
Busmaker Zhengzhou Yutong gained 2.47 per cent.
Bank of China rose 1.35 per cent, having apparently found support after some profit taking last week.
China Minsheng Banking Corp gained 2.6 per cent and Shanghai Pudong Development Bank rose 0.93 per cent.
Huaxia Bank added 0.68 per cent. The bank said it planned to sell 15 billion yuan of five-year bonds to finance its loan business. Guangzhou Shipyard International gained 6.93 per cent, Shanghai Light Industry Machinery added 5.52 per cent and Taiyuan Heavy Industry rose 3 per cent.
Many property stocks rose on expectation that appreciation of the yuan would help boost such companies' bottom lines. Shanghai Industrial Development closed up 4.92 per cent. Shanghai Waigaoqiao Free Trade Zone Development gained a further 7.22 per cent after it jumped its 10 per cent daily limit on Monday.
China Petroleum & Chemical Corp, Asia's biggest oil refiner, added 0.34 per cent.
Angang Steel, China's fourth-largest steelmaker by output, dropped 1.02 per cent.
Baoshan Iron & Steel slipped 0.47 per cent and Wuhan Iron & Steel dropped 0.4 per cent. Shanxi Taigang Stainless Steel fell 4.64 per cent.
Guangdong Baolihua New Energy rose 4.25 per cent after first-half profit soared 630 per cent.
Agence France-Presse, Bloomberg, Reuters