Shenzhen-based stocks soar as China rolls out new reform plans for the city

Source:Global Times Published: 2019/8/19 16:03:39

Skyline of Shenzhen, South China's Guangdong Province Photo: IC

Shares of companies based in Shenzhen, a pioneering city in South China's Guangdong Province, soared after the Chinese government announced on Sunday that it would use the first-tier city as a pilot demonstration area with Chinese characteristics, rebuking a weakening trend in the Chinese stock market caused by the lingering trade war with the US.

The central government's plan was seen by observers as a move to upgrade the city and enable the city to become one of the most advanced in the world.

In total, 66 companies listed at the domestic bourses achieved an average gain of 5.6 percent, on a day when the benchmark Shanghai Index climbed 2.1 percent to close at 2,883.1 points.

Shares of Shenzhen firms in real estate, brokerage, telecommunications and new-energy posted solid gains, while state-owned companies based in the city led the rally.

Shares of utility firm Shenzhen Gas Corporation, infrastructure firm Shenzhen Airport Co, and port operator Shenzhen Yan Tian Port Holdings Co soared to their daily limits of 10 percent shortly after trading being.

Shares of brokerage firm Guosen Securities Co and First Capital Securities Co were also able to reach the 10 percent threshold during afternoon trading. 

Four decades ago, when China began its reform and opening-up policy, Shenzhen was a fishing village near Hong Kong. It is now home to a large number of globally known Chinese companies. 

Shares of telecommunications giant ZTE Corporation, which was caught in the trade war and included on a US blacklist in 2018, saw its shares rise 6.32 percent on Monday. 

There was also a spillover for Shenzhen companies listed in Hong Kong. Shares of the real estate company Kaisa Group Holdings were up 14.39 percent, new-energy car maker BYD Co saw its shares grow by 3.2 percent, and shares of Chinese internet giant Tencent rose 3.37 percent.

Not all Shenzhen-based companies were able to cash in on the policy boost on Monday. Leading domestic, joint-stock commercial bank China Merchants Bank Co saw its shares close flat with a small gain of 0.4 percent. 

The blue-chip CSI 300 Index rose 2.17 percent to 3,791.09 points, while the Shenzhen Component Index climbed 2.96 percent to 9,328.97 points on Monday.

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