Shanghai: China’s benchmark stock index rose by a record 8.3% on speculation the government will act to boost equities and stimulate growth after the worst snowstorms in decades closed transport networks and shut factories.
Citic Securities Co. Ltd, the nation’s largest brokerage, climbed the most in three months after China permitted the sale of new stock funds, the first in five months. The CSI 300 Index rebounded from last week’s decline, the steepest since the measure was compiled in April 2005, and pared a 22% decline from its 16 October peak. “We are probably already at a level where the regulators don’t want to see a further decline in stocks,” said Fan Dizhao, who helps manage the equivalent of $8.3 billion (Rs32,702 crore) at Guotai Asset Management Co. Ltd in Shanghai.
The index, which tracks yuan-denominated A shares listed on China’s two exchanges, climbed 378.18 to 4,950.12 at the 3pm close, the biggest fluctuation among indexes included in global benchmarks. All of the measure’s 300 members rose, apart from 15 that weresuspended or unchanged. Last month’s storms, the worst in 50 years, led several companies to warn profits may drop, prompting speculation authorities would act to boost growth.
Stocks had more than doubled last year before the impact of six interest rate increases and a clampdown on bank lending.
Shanghai Pudong Development Bank Co. Ltd and China Vanke Co. Ltd surged after the government said developers could borrow more to build cheap housing. Aluminium Corp. of China Ltd led commodities producers higher after its parent bought a stake in Rio Tinto group.
China Shenhua Energy Co. Ltd gained after a newspaper report said its parent plans to buy a stake in Fortescue Metals Group Ltd, Air China Ltd and China Southern Airlines Co. Ltd rose after Citigroup Inc. said earnings at airlines likely climbed last year.
Citic Securities climbed 5.72 yuan, or 8.3%, to 75.03—its biggest gain since 2 November. The stock fell 24% last month, compared with a 14% decline on the benchmark index. Haitong Securities Co. Ltd, the nation’s second biggest publicly traded brokerage, surged 3.64 yuan, or 8.1%, to 48.65—its steepest rise since 24 October.
China’s stock regulator approved two new stock funds, ending a five-month freeze, the Shanghai Securities News reported on 2 February. CCB Principal Asset Management Co. Ltd and China Southern Fund Management Co. will start closed-end funds, raising 14 billion yuan ($1.95 billion), it said. CCB Principal received approval to offer a 6-billion yuan fund, Beijing-based spokesperson Ruan Yi said in a phone interview on Monday. The regulator hasn’t set a date for fund raising, she said. China Southern Fund also won approval to offer an 8-billion yuan fund, said Zeng Yihan, the firm’s Shenzhen-based spokesperson.