Shanghai edges up after delay on coal tax

By Winny Wang and Lydia Chen  |   2008-7-9  |     NEWSPAPER EDITION

SHANGHAI stocks edged slightly higher yesterday on speculation that the country will delay introducing higher taxes on coal and other resources.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard currency B shares, edged up 0.81 percent, or 22.55 points, to close at 2,814.95.

Turnover reached 87.48 billion yuan (US$12.86 billion), compared with 82 billion yuan on Monday, and gainers in the Shanghai market outnumbered losers by 598 to 234, with 75 stocks unchanged.

The government may delay the introduction of higher taxes on coal and other resources because of inflationary pressure, the Shanghai Securities News reported yesterday, citing an unnamed source.

The report said a proposed tax increase submitted to the State Council has yet to receive approval and it was unlikely to be introduced within the next three months.

China Shenhua Energy Co, the nation's largest coal producer, added 3.01 percent to 33.93 yuan (US$4.95) and Datong Coal, China's second-largest producer of the fuel by capacity, advanced 4.25 percent to 22.31 yuan.

Yanzhou Coal Mining Co, the listed unit of China's fourth-biggest coal miner, rose 5.61 percent to 20.53 yuan.

Shanghai AJ Corp surged by the daily cap of 10 percent to 10.90 yuan on news that Shougang Holding (Hong Kong) Ltd and Hong Kong tycoon Li Ka-shing will form a joint venture to buy 120 million shares in Shanghai AJ.

China Minsheng Banking climbed 2.03 percent to 6.03 yuan after saying that its first-half profit may rise more than 110 percent on expanded lending and investment returns. Its net income in the first half of last year reached 2.8 billion yuan.

With the approach of the Beijing Olympic Games, investors are becoming more confident that the government won't issue negative news, and Games-related stocks have been popular, according to Qilu Securities Co.