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Special> Global Financial Crisis> Latest
UPDATED: February 23, 2009
China Shares Gain on Stimulus Hopes
Investor confidence was boosted by media reports of a possible government stimulus plan for the real estate sector

Chinese equities gained almost 2 percent to stand above 2,300 points Monday as investor confidence was boosted by media reports of a possible government stimulus plan for the real estate sector over the weekend, analysts said.

The benchmark Shanghai Composite Index climbed 1.96 percent, or 44.3 points, to 2,305.78. The Shenzhen Component Index was up 3.61 percent to 8,727.7 points.

Combined turnover was 215.47 billion yuan ($31.55 billion), significantly up from 173.41 billion yuan on the previous trading day.

Gains outnumbered losses by 864 to 16 in Shanghai and 734 to 14 in Shenzhen.

The upward trend was led by the auto and real estate sectors.

The real estate sector rose 4.54 percent as media reported that authorities said the central government had been studying a stimulus plan for the property sector over the weekend.

Cheng Siwei, a renowned economist, said Saturday at a public lecture that the property sector had replaced the energy sector as the last of the ten industries that the government would support to stimulate the economy.

A plan to rejuvenate China's property sector had already been submitted to the State Council, China's Cabinet, for discussion and approval early on this month.

China Baoan and Pearl River Enterprises rose by the 10-percent daily limit to 9.45 and 7.15 yuan respectively. China Merchants Property Development soared 9.79 percent to 18.06 yuan.

China Vanke, the country's largest residential real estate developer, climbed 4.65 percent to 8.1 yuan. Shares of the Poly Real Estate Group Co., China's second largest developer, gained 5.99 percent to 21.01 yuan.

China's auto shares also surged 5.1 percent as the government had taken measures to promote new energy cars and subsidize farmers to boost auto sales in rural areas.

SG Automotive, Fengfan Co., Weichai Power, Dongan Power and Changfeng Motor rose by the 10-percent daily limit to 7.34 yuan, 8.34 yuan, 28.49 yuan, 7.15 yuan and 8.04 yuan, respectively.

The benchmark Shanghai Composite Index fell from 2,319.44 to 2,209.86 last Wednesday, the largest one-day drop this year in falling volume as investors worried that large gains since Jan. 1 could not be sustained, analysts said.

(Xinhua News Agency February 23, 2009)

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