Shares Soar 6.12% as Feb Loans Surge

Chinese share prices jumped 6.12 percent in surging turnover Wednesday, driven by reports that new yuan-denominated loans might have reached 1.1 trillion yuan (161 billion U.S. dollars) last month, analysts said.

If new loans actually reached that level, it would be "way beyond the market expectation of 500 to 600 billion yuan," Yinhe Securities equity analyst Qin Xiaobin said.

"The large amount of new loans implies that government stimulus plans are taking effect and banks are willing to act fast," he said.

The benchmark Shanghai Composite Index rose 126.68 points to 2,198.11. The Shenzhen Component Index surged 6.91 percent, or 532.07 points, to close at 8,227.69.

Total turnover was 195.75 billion yuan, up from 127.18 billion yuan Tuesday.

On the Shanghai exchange, 917 shares rose while 30 fell. In Shenzhen, 810 shares rose while only two fell.

Driven by the loan news, shares of financial issues rose more than 7 percent on average.

The Shenzhen Development Bank and the Shanghai Pudong Development Bank both jumped by the 10-percent daily limit. Bank of China, the world's third-largest lender by market value, rose 9.37 percent to 3.50 yuan.

Also Wednesday, China released the Purchasing Managers' Index, a major economic performance indicator, which showed the February index rose to 49 from 45.3 in January.

A reading above 50 suggests expansion, while one below 50 indicates contraction. Although the index indicated that manufacturing activity still contracted, the depth of decline had narrowed, analysts said.

The second session of the 11th National People's Congress, the country's top legislature, scheduled to begin Thursday, also raised investors' hopes of further stimulus programs, Qin said.

Besides financials, property and non-ferrous metals shares were among other large gainers.

 

Vanke, the largest real estate developer by market capitalization, rose 6.47 percent to 7.9 yuan, while Gemdale Corp. and Poly Real Estate Group rose 9.98 percent and 8.92 percent to 8.93 yuan and 19.91 yuan, respectively.

 

Jiangxi Copper and Yunnan Copper both rose by the 10-percent daily limit to 16.73 and 13.73 yuan, respectively. 

 

A shareholder smiles in front of the electronic board showing share prices at a stock trading hall in Lanzhou, capital of northwest China's Gansu Province, March 4, 2009. China's benchmark Shanghai Composite Index on the Shanghai Stock Exchange closed at 2,198.11 points on Wednesday, up 126.68 points, or 6.12 percent, from the previous close, while the Shenzhen Component Index on the Shenzhen Stock Exchange closed at 8,227.69 points, up 532.07 points, or 6.91 percent, from the previous close. (Xinhua/Han Chuanhao)