China Light & Power rose 2.31 per cent yesterday as investors responded positively to news of progress in its Shenzhen power station deal and rumours that Citic Pacific may increase its stake in the utility. Analysts said the stock was also in favour as a cheap, defensive play in a period of rising interest rates. The 80-cent gain to $35.30 took China Light's advance over two days to 5.37 per cent. Citic Pacific rose 50 cents to $38.20. On Wednesday, China Light signed a joint venture deal with four other firms for a gas-fired station in Shenzhen. One analyst cautioned that China Light's share-price jump was too strong to be explained by the Shenzhen project alone. 'They don't have the project approved . . . they are still doing the feasibility study and that's the first part of a four-stage approval,' the analyst said. 'There's talk Citic is thinking of upping its stake.' Citic, the Hong Kong arm of the mainland-backed China International Trust and Investment Corp, bought 20 per cent of China Light in January for $16.25 billion. Most analysts dismissed talk that Citic would take a bigger stake in China Light. Steven Thompson, senior analyst at Nikko Research Centre, said: 'They don't have the money. They said last month they don't like their gearing and want to reduce it.' Citic's debt-to-equity ratio of about 65 per cent is the highest among conglomerates. 'Valuations are cheap and people are buying it for defensive reasons,' Mr Thompson said. An analyst from a British house saw the move as possible over the longer term. 'If they upped their stake, they could take control . . Citic is surprising a lot of people by its role in the company,' the analyst said. China Light executives declined to comment.