NewChina Unicom leads gainers in Hong Kong, boosted by Credit Suisse upgrade

Blue-chip companies endured a volatile trading session on Monday morning, with China Unicom leading the gainers in the stock market.

China Unicom, one of the country’s biggest telecom companies, posted a 4 per cent gain to hit a five-day high of HK$14.22, after Credit Suisse raised the target price of the company to HK$25.68 from HK$17.80 due to the strong growth of data usage. The Swiss investment bank said China movile usage may see a 20-fold jump as smartphone penetration may increase to 74 per cent by 2017.

Trading was heavy, with about 62.2 million shares changing hands, above the average daily turnover of 58.5 million shares last week.

Shares of all major lenders reacted positively to Beijing’s decision to stimulate the economy by freeing up cash held by commercial banks. China Construction Bank and ICBC rose more than 1 per cent, topping the list of most heavily traded companies behind only market operator HKEx.

On Sunday, the People’s Bank of China (PBOC) announced a 1.0 percentage point reduction in the reserve requirement ratio (RRR) to 18.5 per cent, following a 0.5 per cent percentage point cut on February 4 and two interest rate cuts since last November. The reduction is seen injecting 1.2 trillion yuan into the economy.