China Business Blog - Aggregated China Business Blogs
Aggregated China Business Blogs
Li remarks send HK shares up 2.33%
Aggregated Source: Shanghai Daily: Business

HONG Kong shares surged 2.33 percent yesterday after Premier Li Keqiang said China's economic growth must not slip below the "bottom line" of 7 percent.

The benchmark Hang Seng Index added 498.92 points to end at 21,915.42 on turnover of HK$66.44 billion (US$8.57 billion).

Premier Li was quoted in state media as saying at a meeting earlier this month that economic growth must stay above the "bottom line" of 7 percent.

The premier said the target was necessary to ensure China's goal of doubling gross domestic product between 2010 and 2020, The Beijing News reported yesterday.

His comments lifted spirits as they indicated the central government would introduce some form of economy-boosting measures should growth fall too much, as it tries to avoid a so-called hard landing.

Following publication of the remarks Chinese companies had a particularly good day.

The Hang Seng China Enterprises Index, which tracks Chinese companies listed on the Hong Kong stock exchange, closed up 3.9 percent at 9,780.16 points, near a six-week high.

Shares in Chinese mainland banks, which suffered losses at the beginning of the week when the People's Bank of China said it would remove a government-mandated floor on lending rates, surged yesterday.

ICBC rose 4.9 percent to HK$5.10 and China Construction Bank jumped 4.8 percent to HK$5.70

Telecom equipment supplier ZTE also soared 20 percent to HK$13.94 after the company said late on Monday that it posted a core profit in the second quarter, its first in a year.

"(Li's) remarks helped stabilize the pessimistic expectations in the market," Sinolink Securities analyst Tao Jinggang said. "There are also expectations for stimulus policies in railway construction."

Turnover jumped more than 70 percent to HK$8.6 billion from Monday's HK$5 billion, which was the lowest so far this year, even as trading interest waned in the afternoon.

Original URL: Click here to visit original article
Copyright Shanghai Daily: Business