Finance and realty lead stocks rally

By Cao Qian  |   2008-7-22  |     NEWSPAPER EDITION

SHANGHAI stocks extended their rally yesterday, closing above the 2,800 barrier with finance and property stocks leading the gains.

The Shanghai Composite Index advanced 83.05 points, or 2.99 percent, to 2,861.42 after reaching an intraday high of 2,865.07.

Turnover in the local market rose to 71.62 billion yuan (US$10.5 billion), compared with 60.54 billion yuan on Friday. Gainers outnumbered losers 872 to 1 while 34 remained unchanged.

"The government's clear intention to maintain a stable stock market, coupled with speculation that new policies might be introduced to stimulate the country's slack real estate market were probably two major reasons behind the rally," said Qin Hong, an analyst with Bohai Investment Research Institute. "However turnover was still not big which meant it was a rather weak rebound."

Banks and insurance stocks both made significant rallies.

China Merchants Bank Co, the country's biggest dual-currency credit-card issuer, climbed 4.18 percent to 23.68 yuan and Shanghai Pudong Development Bank rose 3.9 percent to 22.13 yuan.

Ping An Insurance (Group) Co, the nation's second-largest insurer, gained 4.5 percent to 42.92 yuan while China Life Insurance Co Ltd, the country's largest, increased 3.94 percent to 26.92 yuan.

Meanwhile, real estate developers advanced by more than 7 percent on average, outperforming all other industry sectors amid positive sentiment from the central government. Liu Mingkang, chairman of China Banking Regulatory Commission, said recently that commercial banks should keep a close eye on the country's real estate market and support healthy development of the industry by satisfying necessary and reasonable credit requirements.

China Vanke Co, the nation's biggest listed property developer, jumped 3.8 percent to 8.96 yuan. Cofco Property Group Co Ltd soared 9.61 percent to 12.89 yuan and Financial Steet Holding Co Ltd extended 6.3 percent to 8.6 yuan. PetroChina Co, the country's largest oil producer, advanced 2.4 percent to 15.38 yuan.