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