BEIJING: China’s stocks rose to a seven-year high, led by energy and industrial companies, amid speculation the government is considering merging state-owned enterprises and taking more measures to support economic growth.
PetroChina Co. and China Petroleum & Chemical Corp., the nation’s biggest oil refiners, jumped by the daily limit of 10 percent. Cosco Shipping Co. surged 9.7 percent. China may cut the number of centrally administered SOEs to 40 from the current 112 through mergers and restructuring, the Economic Information Daily reported. The central bank is discussing adopting unconventional policies to rebuild its balance sheet and reinvigorate the economy, including making direct purchases of local government bonds from the market, Market News reported.
The Shanghai Composite Index rose 1.9 percent to 4,475.69 at the 11:30 a.m. break, heading for the highest level since February 2008. The gauge has rallied 88 percent in the past six months, the most among benchmark indexes globally, on speculation SOE reform and cuts in interest rates will allow the government to reach its growth targets this year.
“Big oil names are soaring because of speculation that the government is studying mergers in the industry,” said Clement Cheng, an equity trader at RBC Investment Management Asia in Hong Kong. “The oil sector has been undervalued for a long time.”
The Hang Seng China Enterprises Index added 0.9 percent at the noon break. The Hang Seng Index rose 1.3 percent. The CSI 300 Index climbed 1.1 percent. The Bloomberg China-US Equity Index increased 1.1 percent on Friday. Trading volumes in Shanghai were 25 percent above the 30-day average for this time of day.
