CHINA’S SHANGHAI COMPOSITE, the benchmark index for the country’s A and B shares, finished barely in positive territory today, up 0.08% at 2,909.14, as investors largely ignored the latest moves by Beijing to rein in credit supply in the country.
Meanwhile, Hong Kong’s benchmark Hang Seng Index added 1.73% to close at 22,685.22.
The latest offensive by NATO allies against the embattled Libyan regime also hit downstream petroleum processors as crude prices rose on the North African tensions.
The petroleum sub-index was today’s worst performer, with the tracker losing 0.69% on the day.
The property sub-index was the top performer, adding 0.86%, with the construction and earth-moving equipment sub-index finishing second place on the day, up 0.24%.
According to a Chinese language piece in SinaFinance, investors took some cheer from the State Council’s release late last week of the 12th Five-year Plan, in which it reiterated a plan to construct 36 mln units of affordable housing by 2015, as well as set up an "accountability system" to monitor the construction progress.
The draft also restated its goal of accelerating development of rural areas, encouraging manufacturing upgrades, developing fast-growing high-tech industries, completing a “modern” transportation system, and in particular – providing support to the cement industry to develop treatment of household garbage using cement kilns.
The market also shook off concerns of the announcement late Friday that the Central Bank would again raise the reserve requirement ratio (RRR), this time by 50 basis points, its third such hike this year.
The latest RRR increase, an attempt by Beijing to prevent over-rapid growth and inflation, takes effect on March 25 and was expected by investors, analysts said, and did not lead to a flurry of selling activity, as the stock markets had also already absorbed three interest rate rises in only a few months.
Most banks will now be required to keep 20% of their holdings as cash reserves, which will curtail some loans, with total new loans issued in the country last month plummeting to 81.5 bln usd, down from 158 bln in January.
Gold miners and retailers also rose in tandem today on stronger bullion prices.
The recent release of the half-decade economic plan by the State Council, the country’s Cabinet, provided a shot in the arm for transportation-related counters given the draft’s emphasis on creating a “modern” transportation system.
Recently-listed automobile components maker Changzhou Wujin Nanfang Bearing (SZA: 002553) rose its daily 10% limit to finish at 36.52 yuan, while Xibei Bearing Co Ltd (SZA: 000595) – key supplier to the country’s high-flying high-speed rail network – closed up 6.6% at 13.14 yuan.
Freight car maker Jinxi Axle (SHA: 600495) edged up 0.3% to close the day at 20.31 yuan.
The ongoing anxiety over the still-unresolved nuclear power crisis in Japan helped lift one aluminum producer.
Jilin Liyuan Aluminum Company Ltd (SZA: 002501) ended up 7.8% at 56.56 yuan, as analysts estimate domestic finished aluminum demand over the next decade will increase multifold, with a strong order flow expected from the wind power generation industry.
However, the strong bump last week to dedicated wind and solar firms in China came back to earth today as no new bad news came out of Japan over the weekend.
Baoding Tianwei Baobian Electric (SHA: 600550
See recent:
JAPAN TRAGEDY: How Will China Shares Respond?
