China’s A-shares gain ground, led by coal and cement stocks as the sixth party plenum opens

Hang Seng Index also advances, tacking on 1 per cent to 23,604

PUBLISHED : Monday, 24 October, 2016, 9:15am
UPDATED : Monday, 24 October, 2016, 5:44pm

China stocks ended higher on Monday, bolstered by a rally in the coal and cement sectors, as investors watched for new economic policies from the sixth party plenum that kicked off in Beijing on Monday.

The CSI 300, which tracks large companies listed in Shanghai and Shenzhen, gained 1.2 per cent or 39.8 points to 3,367.58. The Shanghai Composite Index rose 1.21 per cent to 3,128.25. Shenzhen Component Index increased 0.87 per cent to 10,842.64. The Nasdaq-like ChiNext gained 0.91 per cent to 2,200.8.

In Hong Kong, the Hang Seng China Enterprises Index jumped 1.72 per cent or 166.52 points to 9,852.9, while the Hang Seng Index gained 0.98 per cent to 23,604.08. Hong Kong markets were closed on Friday owing to Typhoon Haima.

“Hong Kong’s market is obviously driven by China companies today,” Sam Chi-yung, senior strategist of South China Research said. He added that investors expect to see more economic policies on China’s structural reform, from the four-day 6th Communist Party plenum in Beijing that kicked off on Monday.

Among sectors, coal producers listed in China surged 6.43 per cent as data shows domestic coal prices continued to surge, with Qinhuangdao coal prices reaching 640 to 650 yuan per tonne. China Coal Energy Co jumped by its 10 per cent daily limit, ending at 6.57 yuan, while China Shenhua Energy Co shares gained 7.32 per cent to 17.3 yuan.

Meanwhile, the cement sector gained 3.52 per cent. Anhui Conach Cement Co rose 3 per cent to 16.98 yuan while Sichuan Shuangma Cement was limit up 10 per cent to 29.13 yuan.

Hong Kong-listed Chinese companies also moved higher as trading turnover rising to HK$74.07 billion, compared to a daily average of less than HK$60 billion last week. China Shenhua Energy Company gained 3.85 per cent to HK$16.72, making coal the best sector performing sector in the city. Automotive and banking stocks were also among the gainers.

Southbound capital flows through Shanghai Hong Kong Stock Connect recovered to 713 million yuan (HK$816.9 million), the highest daily flow since October 12.

Among other advancers, BOC Hong Kong shares soared 4.45 per cent after Hong Kong Commercial Daily reported that the bank has signed an agreement to sell its subsidiary Chiyu Banking Corporation to Xiamen International Bank for US$3 billion (HK$23.4 billion). BOC said in a statement after the market close that no legally binding agreement has been reached on the potential disposal of Chiyu Banking.

Enerchina Holdings, the parent company of Win Wind Securities, with a 36.6 stake held by businessman Ou Yaping, saw its shares jump 67.2 per cent before a trading halt at noon.

Win Wind, with China Evergrande Group and online-only Zhong An Online P&C Insurance are reportedly preparing to set up a securities company in Guangdong’s Free Trade Zones in Nansha, according to mainland media, citing regulatory sources. Zhong An Online P&C Insurance was jointly established by Jack Ma Yun of Alibaba, Pony Ma Huateng of Tencent Holdings and Ma Mingzhe of Ping An Insurance.

Postal Savings Bank of China shares dropped 3.36 per cent to HK$4.60, the lowest level since its listing on September 28, after the stabilisation period ended on October 20. Major shareholder National Council for Social Security Fund sold 8 million shares at HK$4.76 on October 17, decreasing its shareholding from 5.02 per cent to 4.98 per cent, exchange data showed.

Nomura analysts said coming third-quarter results will be the market focus this week. China Mobile shares fell 1.2 per cent to HK$90.9 after reporting lower-than-expected earnings in the third quarter.