Shanghai index edges up on banking, metal shares

Shanghai stocks rose nearly 1 percent yesterday, led by gains in banking and metals-related shares after a strong debut by gold futures on the Shanghai Futures Exchange.

Most airline stocks dropped after China Eastern shareholders' rejection of a proposed $920 million sale of a 24 percent stake in the carrier to Singapore Airlines damaged hopes for an industry restructuring.

The Shanghai Composite Index rose 0.91 percent to 5435.807 points, near its intraday high of 5437.764 points.

Turnover in Shanghai A shares was fairly active at 138.8 billion yuan, although down from Tuesday's 183.7 billion yuan.

"Investors are starting to bet on stocks that may release better-than-expected annual results," said Zhang Yang, analyst at Orient Securities.

"The launch of gold futures is also a catalyst for market sentiment by encouraging interest in metals shares in general."

The index had formed a bullish double bottom in the past two months, and is set to rise above 5600 points, said Lu Jiehua, analyst at Shenyin Wanguo Securities Co.

Merchants Bank climbed 1.24 percent to 40.81 yuan.

Zhongjin Gold surged 3.58 percent to 138.95 yuan.

In addition to the gold futures launch, Zhongjin, a top gold miner, said it had won regulatory approval to issue additional shares in a private placement to acquire mining assets.

Other metals shares also surged. Aluminium Corp shares jumped 5.83 percent to 42.32 yuan, while Jiangxi Copper shares gained 5.19 percent to 59.99 yuan.

China Eastern fell 1.75 percent to 20.27 yuan in Shanghai. Air China rose 0.71 percent to 28.46 yuan.

The property sector rebounded yesterday after losses on Tuesday, with China Merchants Property up 4.3 percent to 66.75 yuan.

Bayi Steel shares soared 10 percent, their daily limit, to 23.43 yuan after the company said in a preliminary earnings statement that 2007 net profit rose 158 percent.

Hang Seng gains

Hong Kong stocks rose sharply yesterday as commodity plays leapt on record gold prices and shares in local property developers gained on expectations of more US rate cuts.

The market ended near its day highs, with the resource-heavy China Enterprises index of H shares, or Hong Kong-listed shares of mainland companies, finished up 3.1 percent at 16139.46, marking its best one-day percentage gain since November 29.

The benchmark Hang Seng Index closed at 27615.85.

Agencies

(China Daily 01/10/2008 page15)