China's stocks jump on sup­port pledge as deals spur de­vel­op­ers

The Pak Banker - - MARKETS/SPORTS -

Chi­nese stocks climbed the most in more than a week af­ter the new head of the se­cu­ri­ties reg­u­la­tor sig­naled he will keep prop­ping up the equity mar­ket and de­vel­op­ers an­nounced ac­qui­si­tions.

The Shang­hai Com­pos­ite In­dex ad­vanced 1.8 per­cent, with more than 50 shares ris­ing for each one that fell. China Vanke Co. jumped the most in more than a year in Hong Kong af­ter say­ing it plans to pay as much as 60 bil­lion yuan ($9.2 bil­lion) for a stake in Shen­zhen's ur­ban tran­sit com­pany. China Over­seas Land & In­vest­ment Ltd. climbed to the high­est close this year af­ter say­ing it'll ac­quire Citic Ltd.'s prop­erty as­sets.

Liu Shiyu, chair­man of the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion, said it was too early to think about the state res­cue fund leav­ing the mar­ket, while a new reg­is­tra­tion-based sys­tem for IPOs would take time. Data over the week­end showed the na­tion's in­dus­trial pro­duc­tion and retail sales both grew less than econ­o­mists fore­cast in the first two months of 2016, while China's broad­est mea­sure of new credit for Fe­bru­ary came in less than half of the es­ti­mate in a Bloomberg sur­vey.

"Liu's vow to help with the mar­ket's re­cov­ery brought back some in­vestor con­fi­dence," said Cas­tor Pang, head of re­search at CorePa­cific Ya­maichi Hong Kong. The econ­omy is still look­ing "poor," he said.

The Shang­hai Com­pos­ite rose to 2,859.50 at the close. The ChiNext In­dex of smaller com­pa­nies jumped 4.6 per­cent, the most in six weeks. The Hang Seng China En­ter­prises In­dex climbed 1.5 per­cent in Hong Kong, while the Hang Seng In­dex ad­vanced 1.2 per­cent. Liu vowed to step in "de­ci­sively" if needed to curb panic and de­fended in­ter­ven­tion fol­low­ing last sum­mer's $5 tril­lion sell­off. Trad­ing on the world's se­cond-largest stock mar­ket tum­bled last week to the low­est level since 2014 as mar­gin traders un­wound bullish po­si­tions de­spite sus­pected state sup­port for eq­ui­ties. China's bench­mark gauge has lost 19 per­cent this year, still the most among 93 global bench­mark in­dexes tracked by Bloomberg.

Vanke surged 10 per­cent. It signed a mem­o­ran­dum of un­der­stand­ing with Shen­zhen Metro Group Co. to ac­quire a stake in a unit for an es­ti­mated 40 bil­lion yuan to 60 bil­lion yuan, the firm said Sun­day, in a move that will make the tran­sit com­pany a large share­holder. China Over­seas Land gained 1.8 per­cent af­ter say­ing it will pay about 31 bil­lion yuan for res­i­den­tial as­sets held by Citic, China's big­gest con­glom­er­ate. Citic has been seek­ing to un­lock value from its land port­fo­lio over the past year.

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