By Zhang Shidong
Feb. 3 (Bloomberg) -- China’s stocks rose, driving the benchmark index to its highest in almost two months. Youngor Group Co. and PetroChina Co. gained on speculation they may benefit from new government incentives.
Youngor Group added 5.3 percent after Shanghai Securities News said a stimulus plan for the textile and machinery industries will be submitted to the Cabinet tomorrow. PetroChina advanced 2.1 percent after an official said the government is discussing a stimulus plan for oil refiners. Guangzhou Shipyard International Co., a unit of China’s biggest shipbuilder, climbed the 10 percent daily limit after a report said the local industry increased profit 51 percent last year.
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 49.13, or 2.4 percent, to 2,060.81, the highest close since Dec. 10. The CSI 300 Index, measuring the exchanges in Shanghai and Shenzhen, gained 2.5 percent to 2,108.91.
“The market has heightened expectations that more measures and policies will come along to boost economic growth and various industries,” said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing.
Aluminum Corp.
Aluminum Corp. of China Ltd. jumped by the 10 percent limit on speculation the nation’s largest producer of the metal may benefit from the potential purchase of Rio Tinto Group’s assets by its parent.
The Shanghai Composite Index, the world’s second-best performer this year, has rebounded 18 percent since the government pledged 4 trillion yuan ($584 billion) of spending to revive economic growth. The central bank has also cut the key lending rate five times since September to support industries and stem job losses. The government said Jan. 14 it would cut taxes and offer subsidies for the auto and steel industries.
Youngor Group, China’s biggest maker of men’s clothing by sales, advanced 5.3 percent to 8.94 yuan. Nanjing Textiles Import & Export Corp. gained 3.7 percent to 4.19 yuan. Shenzhen Textile (Holdings) Co. jumped by the maximum 10 percent daily cap to 5.89 yuan. Luthai Textile Co., a textile maker in the eastern province of Shandong, added 6.7 percent to 7.50 yuan.
The incentives may include raising export rebates for textile companies to as much as 17 percent, Shanghai Securities News said. The current rate is 14 percent. The plan may provide support to help develop the machinery industry, reducing reliance on imports, the report said.
Changsha Zoomlion
Changsha Zoomlion Heavy Industry Science & Technology Development Co., China’s second-biggest maker of concrete- handling machinery, advanced 2.2 percent to 15.90 yuan. Guangxi Liugong Machinery Co., a Chinese maker of construction equipment, rose 2.3 percent to 13.58 yuan.
“It’s just amazing when you look at speed of implementation and announcements,” said Diane Lin, Sydney-based portfolio manager at Pengana Capital, which oversees about $1.9 billion. “The stimulus has been put firmly in place and it will continue to stimulate demand.”
PetroChina, the nation’s biggest oil company, rose 2.1 percent to 10.57 yuan. China Petroleum & Chemical Corp., Asia’s biggest oil refiner, also known as Sinopec, gained 1.5 percent to 7.95 yuan.
The government may enact the stimulus plan for the oil refining and petrochemicals industry before a gathering of the country’s legislature in March, an official at the state-backed China Petroleum and Chemical Industry Association said today.
Guangzhou Shipyard
Guangzhou Shipyard jumped the maximum 10 percent to 18.26 yuan. China State Shipbuilding Co., the country’s biggest shipbuilder, rose 7 percent to 49.55 yuan.
China’s shipbuilding industry posted a 51 percent rise in profit last year to 28.3 billion yuan, Xinhua News Agency said, citing the Ministry of Industry and Information Technology. China’s share of the global shipbuilding market rose to 29.5 percent last year from 22.9 percent in 2007, it said.
Aluminum Corp. of China, also called Chalco, surged the maximum 10 percent to 7.79 yuan. Parent Chinalco, the largest shareholder in Rio, said yesterday it was in “initial talks” to buy some assets from the world’s third-biggest mining company. Chalco said today the company wasn’t involved in the discussions.
“The market may have wrongly believed that Chalco intends to buy Rio Tinto assets,” Peng Bo, analyst at Ping An Securities Co., said by phone from Shenzhen today. “Some funds took it as an excuse.”
The following companies were among the most active in China’s markets. Stock symbols are in brackets after companies’ names.
Shipping lines: The Baltic Dry Index, a measure of shipping costs for commodities, posted a 10th consecutive advance as the end of China’s New Year break spurred business. The index tracking transport costs on international trade routes rose 2.7 percent to 1,099 points, according to the Baltic Exchange.
China Cosco Holdings Co. (601919 CH), the country’s largest container line, added 0.28 yuan, or 3.1 percent, to 9.40. Cosco Shipping Co. (600428 CH), a unit of China’s biggest shipping company, climbed 0.80 yuan, or 9.7 percent, to 9.03.
Bank of China Ltd. (601988 CH), the country’s third-largest bank, added 0.03 yuan, or 1 percent, to 3.10. Bank of China had its stock rating raised to “buy” from “neutral” at Goldman Sachs Group Inc.
China Construction Bank Corp. (601939 CH), the country’s second-largest bank, rose 0.06 yuan, or 1.5 percent, to 4.08. Construction Bank said it received regulatory approval to raise as much as 40 billion yuan selling subordinated bonds to boost capital.
Industrial & Commercial Bank of China Ltd. (601398 CH), the nation’s biggest listed lender, gained 0.07 yuan, or 1.9 percent, to 3.73. The bank said its overseas assets increased by 15 percent last year as the lender curbed losses tied to the global financial crisis.
To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net
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