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Stocks rise for 3rd day

(Shanghai Daily)
Updated: 2007-03-08 13:27

Shanghai's stocks rose for a third day after earnings increased at companies including Hunan Zhuye Torch Metals Co, GD Power Development Co and Sany Heavy Industry Co.

"Corporate earnings are still optimistic and that will keep supporting market sentiment," said Zhang Qi, an analyst at Haitong Securities Co in Shanghai.

Gains were capped after the foreign exchange regulator said the government may allow domestic investors to buy more overseas shares. Companies with dual listings such as ZTE Corp declined.

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The Shanghai Composite Index, which tracks the bigger of domestic stock exchanges, rose 0.6 percent to 2,913.71. The Shenzhen Composite Index, which covers the smaller one, added 0.9 percent to 756.60.

Zhuye Torch Metals, the publicly traded arm of China's biggest zinc producer, added 0.10 yuan (1.29 US cents), or 0.7 percent, to 15.59 yuan.

Profit surged almost sixfold last year to a record 426 million yuan as higher prices of zinc, used to coat steel, boosted sales, the company said.

Yunnan Chihong Zinc & Germanium Co, a zinc producer in the southern province of Yunnan, jumped 5.83 yuan, or 6.4 percent, to 97.39 yuan. Shenzhen Zhongjin Lingnan Nonfemet Co, China's third-largest zinc producer, climbed 0.92 yuan, or 3.8 percent, to 25 yuan.

GD Power Development, the Shanghai-listed unit of one of China's five largest electricity producers, added 0.08 yuan, or 0.8 percent, to 10.40 yuan. The company said 2006 profit rose 8 percent from a year earlier to 1 billion yuan on higher prices.

China Yangtze Power Co, owner of the world's biggest hydropower project, gained 0.25 yuan, or 2.1 percent, to 11.99 yuan.

Sany Heavy Industry, China's biggest maker of machinery for handling concrete, rose 0.89 yuan, or 2.1 percent, to 43.24 yuan.

Profit jumped 153 percent last year to 557 million yuan as demand surged for building equipment, the company said.

ZTE, China's biggest publicly traded phone-equipment maker, fell 0.86 yuan, or 1.8 percent, to 45.94 yuan. The company's Hong Kong-listed shares are cheaper than its yuan shares.

Angang Steel Co, China's fourth-largest steelmaker by output, lost 0.13 yuan, or 1.1 percent, to 12.24 yuan. China Life Insurance Co, the nation's biggest insurer, slid 0.04 yuan, or 0.1 percent, to 33.12 yuan.

China may let domestic investors invest more of the nation's US$1 trillion in foreign currency reserves overseas, a move likely to reduce the flow of local funds into the country's stock markets.

"Psychologically speaking, such news will spook the market on concern of fund outflows," said Haitong Securities' Zhang.

The investment quota for qualified domestic institutional investors, known as the QDII plan, is "more likely to meet the needs for domestic investors and may be widened," Hu Xiaolian, director of the Chinese State Administration of Foreign Exchanges, said today in Beijing.

Chinese companies have been approved to invest a total of US$13.9 billion overseas. Currently, banks participating in the QDII program can invest only in bonds, baskets of bonds and fixed-income derivatives, while fund managers can also put money in equities.