New | China’s financial stocks surge, inspired by Shanghai-Hong Kong stock plan
Mainland China’s financial stocks soared on Tuesday in Shanghai, with Bank of China hitting its daily upward limit, on news of the cross-border stock trading scheme announced Monday by Hong Kong and mainland regulators.
BOC shares were suspended on the Shanghai Stock Exchange upon hitting a daily limit above 10 per cent. The bank on Monday was declared a clearing agent for the so-called “through train”, a platform that will allow a limited level of mutual market access for traders in Hong Kong and Shanghai.
It was the first time in six years that the bank’s shares hit the daily limit. Yuanta Securities in Shanghai said BOC’s settlement and clearing fee income could grow by 10 per cent year on year in 2015 to 18 billion yuan (HK$22.8 billion).
Several mainland banks rode the positive sentiment during morning trading in Shanghai. Agricultural Bank of China shares climbed 6 per cent, while shares at Industrial and Commercial Bank of China, Bank of Communications, China Citic Bank and Pudong Development Bank also gained on the news.
“News of the stock-connect plan has generally lifted lots of the mainland financials that are perceived to benefit,” said Tang Yayun, an analyst at Northeast Securities in Shanghai.
China Everbright Bank shares in Shanghai jumped by more than 3 per cent on Tuesday morning after the bank issued a stock filing that said its state-owned conglomerate parent would restructure as a joint stock limited company.
The restructuring would reduce the government’s direct interest in the Beijing-based corporation to 44.33 percent, down from 100 percent, following a similar restructuring of China Citic Group earlier this year.
