Chinese Construction Shares Rise on Stimulus Bets

Published Date : Dec 15, 2014

For the second consecutive day, China’s stocks have risen, led by railway and construction companies. Their growth has been based on the speculation that the government will take improved steps to support economic growth.

China Railway Group Ltd. and China State Construction Engineering Corp. gained more than 7 per cent, enough to lead the rise for infrastructure related companies. Meanwhile, Premier Li Keqiang is visiting Kazakhstan to forge a Silk Road Fund that could finance the building of a steady infrastructure that will link markets across Asia.

East Money Information Co. surpassed the daily limit for the second day to send a small cap gauge to a record high. There was 11 per cent hike for Hong Kong’s Agile Property Holdings Ltd.

An index drop of nearly 1.6 per cent was wiped out from the Shanghai Composite Index, further adding 0.5 per cent at the close and increasing gains over the previous month to 19 per cent. Chinese stocks can extend their gains to next year through fiscal stimulus, as stated by CLSA Ltd. Economic growth will steady itself in 2015, as mentioned by the central bank’s chief economist.

The Shanghai Index has surged by almost 40 per cent in 2014 in between speculation the central bank will supplement the slashes in interest rates along with a reserve requirement ratio reduction to aid an economy that is currently heading for its weakest annual expansion since 1990.

CSI 300 Index has risen 0.8 per cent, while the Hang Seng China Enterprise Index slipped 0.2 per cent as financial shares slowed down.