Published on : Apr 27, 2015
The stocks of China rallied up too much in three months among the speculation, which the government has been considering about merging the state-owned enterprises and taking some more steps that will support the economic growth.
The Economic Information Daily informed that China Petroleum & Chemical Corp., Cosco Shipping Co., Baoshan Iron & Steel Co., and PetroChina Co., all these companies went up by the 10% daily limit. China may further cut the number of SOEs that are centrally administered to almost 40 from the present number of 112 by the medium of restructuring and mergers. The central bank is also discussing about adopting some unconventional policies which will reinvigorate the economy. It will also include the direct purchasing of local government bonds from the market.
The Shanghai Composite Index went up by 3% to 4,527.40 at the close, the most since 21 January. The gauge has been rallying up to 95% in the last six months, majorly among all the benchmark indexes across the globe. This was due to the speculation SOE reform and the cuts in interest rates which will allow the government to achieve its growth targets in this year.
In Hong Kong, a trader at the RBC Investment Management Asia, Clement Cheng stated that big oil companies are soaring due to the anticipation that the government is going to support the mergers in the industry. Moreover, the oil sector has been undervalued for quite some time now.
The Hang Seng China Enterprises Index made an addition of 1.7%; whereas, the Hang Seng Index grew by 1.3%. The CSI 300 Index climbed around 2.2% and the Bloomberg China-US Equity Index was increased by 1.1% on Friday. The trading volumes in Shanghai were 20% above the monthly average.