Launch of SZ- HK trading link likely to bolster stocks this week

The market will likely benefit from several pieces of good news this week, including rising expectations for the launch of the trading link between the Hong Kong and Shenzhen stock exchanges, media reports said.

Premier Li Keqiang’s comments that China will accomplish several key development tasks in 2016, plus a raft of data showing signs of economic stabilization, helped bolster risk appetite, Reuters reported on Friday.

The stable economy will provide good environment for the mainland’s markets in a short term, the China Securities Journal reported on Saturday.

Infrastructure- related stocks such as chemical engineering, cement and nonferrous metals have received a boost from the recent positive sentiment about the economy, which will continue to perform well, the report said.

In addition, the launch of the trading link between Hong Kong and Shenzhen will benefit the stock markets on both sides, especially for the Hong Kong market, according to the report. Many emerging companies in Hong Kong are likely to get a higher evaluation after the link is launched.

In the short term, investors should pay close attention to mainland sectors like home appliances, autos and biological medicine, according to the report.

Speaking at the Shenzhen stock exchange on the first stop of a roadshow on the mainland to promote the trading link between Hong Kong and Shenzhen, Charles Li, chief executive of Hong Kong Exchanges and Clearing, urged Chinese investors to diversify their holdings with Hong Kong stocks. He joked that with real estate prices so high in Shenzhen, shares may be a better bet, Reuters reported on Friday.

The benchmark Shang- hai Composite Index edged down 0.49 percent to close at 3,192.86 points on Friday, down 0.10 percent for the week.

The Shenzhen Component Index finished 0.51 percent lower at 10,889.11 points on Friday, up 0.10 percent for the week.

The CSI 300 index of the 300 biggest companies traded in Shanghai and Shenzhen decreased 0.56 percent to close at 3,417.46 points on Friday. The ChiNext Index, which tracks China’s NASDAQ- style board for high- tech and emerging start- ups, shed 0.23 percent to 2,157.96 points.