Approval of Shanghai zone lifts equities
Updated: 2013-08-27 06:50
By Shi Jing in Shanghai (China Daily)
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The shares of Shanghai Material Trading, which is closely related to the Shanghai FTZ project, have risen more than 80 percent since the project was approved. CTS has seen its price jump 60 percent.
"The free trade zone project will, of course, help increase international freight volume in Shanghai. This is a direct feel-good factor prompting the rise," said Wang Jianhui, chief economist at Southwest Securities Co Ltd.
The buying "frenzy" surrounding the concept stocks helped move market sentiment and pushed the benchmark Shanghai Composite Index up 1.9 percent to close at 2,096.74.
Volume didn't budge much, though, rising to 99.1 billion yuan from 94.5 billion yuan the previous trading day.
"Of course, the free trade zone project has helped the market's rally. But the various concept stocks don't make up a large proportion of listed stocks. Thus, the impact is limited.
"Meanwhile, some listed companies based in Shanghai, such as travel agency Shanghai Jinjiang Travel Co Ltd, saw their prices gain on Monday as a combined result of the free trade zone project and the coming three-day Mid-Autumn holiday," said Wang.
Optimism over the official Purchasing Managers' Index, set for release on Sept 1, also contributed to the rally on Monday. It is expected that the economy will pick up momentum soon, Wang said.
"Another major reason is a technical rebound led by securities companies. The Shanghai Stock Exchange has expressed willingness to further study the feasibility of the T+0 trading system, which is another feel-good factor," he added.
Under T+0 trading, stock transactions would settle the same day, improving brokers' financial position.
Stock prices of seven brokering firms were up more than 5 percent. Haitong Securities Co Ltd was up 8.1 percent to 11.35 yuan.
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