Index tops 4,800 on plan for cooperative mode of funding
Print Edition
SHANGHAI’S key stock index surged over 3 percent to close above 4,800 points yesterday as infrastructure and transport stocks soared after the central government said it was seeking private funding for public projects.
The Shanghai Composite Index surged 3.35 percent to 4,813.8 points, the highest close since January 21, 2008.
The National Development and Reform Commission, China’s top economic planner, yesterday unveiled a “public-private partnership” in public infrastructure projects to attract private capital.
A list of the projects, which cover water, transport, urban facilities, public services and environment, was posted on the NDRC website.
The list contains 1,043 projects worth 1.97 trillion yuan (US$318 billion) spread over 28 provinces and municipalities on the Chinese mainland.
Shandong Hi-speed Co, Qianjiang Water Resources Development Co and Rizhao Port Co all surged by the daily 10 percent limit to 8.90 yuan, 22.51 yuan and 7.15 yuan respectively.
Founder Securities said the cooperative mode offers investors a long-term opportunity. It will also benefit local governments, the private sector and banks.
“Funds unlocked from last week’s new share subscriptions also helped the market to rally today,” said Zhang Qi, an analyst with Haitong Securities.
Companies launched 20 initial public offerings last week, with funds from unsuccessful subscriptions returning to the market this week.
“Investors chased heavyweight blue-chips as they underperformed earlier compared with small company stocks,” said Zhang.
Dai Ming, a money manager at Hengsheng Asset Management, told Bloomberg News: “We’re seeing funds rotate to underperforming big caps.
“They may do better than small caps going forward. Small caps have been coming under lots of pressure from regulatory scrutiny given the huge gains they’ve made.”
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