Xiongan shares up as construction continues

Stocks related to the Xiongan New Area in North China's Hebei province are seeing a fresh uptrend as construction for the zone pushes ahead.

Shares of 15 companies involved in the Xiongan area's development, including those in environmental protection, mechanical engineering and construction materials, surged by the 10 percent upside limit on March 8, according to a report by Shenzhen Economic Daily.

About 34 percent of 79 Xiongan-related shares rose by more than 5 percent, Chongqing Economic Times reported.

The strong performance came right on the day when Chen Gang, Party chief of Xiongan, spoke about the progress made in the new area at the two sessions in Beijing.

On March 12, several Xiongan-related stocks also surged with some of them hitting the daily limit, the finance section of Sina reported.

The share price increases were also seen last month.

On Feb 22, the first trading day after the Spring Festival holiday, shares in several listed companies, including Hebei-based Tangshan Jidong Cement, Beijing Hanjian Heshan Pipeline Co, and CSD Water Service climbed by the daily limit, Chongqing Economic Times reported.

The planning and construction of the Xiongan New Area, a new economic zone about 100 kilometers southwest of Beijing, have been steadily progressing since the area was established on April 1 last year to help spare Beijing of functions unrelated to its status as national capital.

About a year later, the planning brief of Xiongan was almost completed, according to He Lifeng, minister of the National Development and Reform Commission, the country's top economic planner.

Some projects, such as the intercity railway between Beijing and Xiongan, and the afforestation project, have already started, He said on March 6 during a news conference on the sidelines of the first session of the 13th National People's Congress.

Investors were cheered by the positive news in the area, but their enthusiasm for Xiongan should not be blind, Huang Cendong, an analyst with Sinolink Securities, was quoted as saying in a report in Shenzhen Economic Daily.

Huang said shares related to Xiongan are at present mostly themed speculation and companies that will successfully participate in the building of the area in the future may be sought after in the stock market.

Last year, after central authorities announced the establishment of the new area, the share prices of certain companies rose for several successive days, settling in a significantly higher territory. These companies are either located in the counties that are earmarked for Xiongan or involved in the area's transportation, construction materials and infrastructure construction.

However, such stocks, known as "Xiongan concept stocks", cooled after securities supervision authorities subsequently enhanced measures to prevent financial risks.

Shenzhen Economic Daily's report said after development policies in the new area are nailed down, listed companies will have opportunities to realize their value, rather than just conceptual investment.