Stocks rise on hopes of better economic figures

By Pan Xiaoyi  |   2009-6-30  |     NEWSPAPER EDITION

SHANGHAI'S key stock index rose more than 1 percent yesterday in anticipation of better economic conditions in the second quarter.

The Shanghai Composite Index gained 1.61 percent, or 47.1 points, to close at 2,975.31 points, after touching a low of 2,918.39 points. Gainers outnumbered losers 540 to 271 while 31 stocks were unchanged. Turnover swelled to 136.9 billion yuan (US$20.13 billion) from 115.3 billion yuan last Friday.

Zhou Xiaochuan, the governor of the People's Bank of China, the central bank, said over the weekend that economic growth in the second quarter is likely to be faster than the 6.1 percent rise in the first quarter, the slowest pace in nearly 20 years.

The State-owned Assets Supervision and Administration Commission is reportedly set to stabilize the stock market via stricter limits on the sale of convertible bonds and curbs on reducing stakes by biggest shareholders of state-owned companies, .

''Shares were strong despite the pressure from the resumption of new share sales after a nine-month break,'' said Wang Xingjun, an analyst at Donghai Securities Co. ''The benchmark index was bolstered by property developers and PetroChina.''

But Wang warned investors, who seemed to pay less attention to risks as gains in share prices have boosted confidence, to be cautious.

Property developers gained after institutional funds poured in. Gemdale Corp, a Chinese partner of ING Group NV, jumped 1.9 percent to 16.08 yuan and Poly Real Estate Group Co, China's second-largest developer by market value, soared 4.06 percent to 27.71 yuan.