SAIC, Xiali shares rise amid talk of subsidies
Shares of SAIC Motor Corp and FAW Xiali rose strongly yesterday on improved domestic demand and expectation Beijing will soon dole out subsidies for car purchases in rural areas.
Beijing last month approved the allocation of 5 billion yuan (HK$5.67 billion) to farmers to replace outdated motorcycles and rural tri-cars with engine capacity of 1.3 litres or less between March 1 and December 31.
The State Council might announce today details of the subsidies' distribution, the mainland media reported yesterday. However, China International Capital Corp expects that to happen at the end of this month.
'We believe that the subsidy will be 10 to 13 per cent of a vehicle's value, which should boost sales of minibuses and light trucks by 15 per cent and 10 per cent, respectively,' said Wang Zhihui, an analyst at CICC.
SAIC, the country's largest carmaker, closed 9.96 per cent higher at 8.28 yuan, compact-car maker FAW Xiali rose 10.1 per cent to 5.45 yuan, while truck maker Dongfeng Automobile gained 7.07 per cent to 4.09 yuan.
However, shares of Hong Kong-listed carmakers finished mixed yesterday.
Denway Motors, a unit of Guangzhou Automobile Industry Group, rose 5.83 per cent to HK$2.36, while compact-car maker Geely Automobile Holdings gained 4.62 per cent to 68 HK cents.
But passenger car maker Dongfeng Motor Group declined 4.51 per cent to HK$2.75, hybrid maker BYD tumbled 3.95 per cent to HK$15.58, Brilliance China Automotive Holdings dropped 2.08 per cent to 47 HK cents and Great Wall Motor fell 0.36 per cent to HK$2.79.
