SHANGHAI shares climbed the most in 10 trading days today, encouraged by a broad rally after a newspaper report said the government “won’t massively sell shares” to cool equity markets.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, jumped 2.18 percent, or 105.61 points, to close at 4,941.78 at 3pm today. It was the biggest daily gain since December 6.
Gainers in the Shanghai market outnumbered losers 738 to 38 while 70 were unchanged.
The Shenzhen Composite Index, which covers the smaller mainland stock market, gained 2.22 percent, or 29.12 points, to 1,339.09.
The strong performance came today after Shanghai Securities News reported that the government “won’t massively sell shares” to cool equity markets.
Companies owned by the central government are committed to providing shareholders with sustained returns, strengthening business and enhancing the economic influence of the state-owned sector, the Shanghai Securities News said, citing Li Rongrong, director of the State-owned Assets Supervision and Administration Commission.
State-owned companies aren’t supposed to trade shares or seek to profit from price differences in the stock market, according to the newspaper report.
Still, these companies may sell shares “within limits” when stock prices are too high, to remind investors of the risks involved in the stock market, the newspaper reported.
Huaneng Power International Inc was among the industrial stocks that gained today after buying a stake in a Shenzhen electricity supplier.
Huaneng Power, China’s second-biggest power producer by market value, climbed 2.79 percent, or 0.38 yuan (5 US cents), to 14 yuan.
China Petroleum, Asia’s biggest oil refiner and also known as Sinopec, advanced 2.76 percent, or 0.58 yuan, to 21.57 yuan. PetroChina, the nation’s biggest oil company, also gained 1.20 percent, or 0.35 yuan, to finish at 29.59 yuan.
China may impose a tax of as much as 10 percent on crude oil output and introduce a fuel levy at an “appropriate” time to raise revenue for provinces and help fund roads, Vice Finance Minister Zhu Zhigang said.
The ministry would collect a five percent tax on crude oil and submitted a proposal to set the levy at twice that rate, Zhu said in a statement on the Beijing-based ministry’s Website.
Chinese oil producers presently pay a tax on any revenue above US$40 a barrel for oil they sell as a so-called windfall tax, introduced in March 2006. Payments will reach 60 billion yuan this year, the government said on December 6.
Meanwhile, China Life Insurance Co, the nation’s biggest insurer, was up 3.04 percent, or 1.67 yuan, to 56.63 yuan. The company said it received 183.8 billion yuan in premiums in the first 11 months of this year, without providing any year-earlier figures.
China United Telecommunications Corp, which controls the country’s second-largest cell-phone operator, jumped 6.76 percent, or 0.66 yuan, to 10.42 yuan. Its Hong Kong-listed unit China Unicom Ltd had its 12-month target price raised 17 percent to HK$20.40 by analyst Wang Jinjin at UBS AG.