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China shares rise on restructuring hopes
(AP)
Updated: 2005-09-19 19:51
China shares rose modestly on Monday as investors bought shares in ailing companies in hopes they
will be delisted and restructured, the Associated Press reported.
The benchmark Shanghai Composite Index nudged upward 0.63 percent to
1,220.63. The Shenzhen Composite Index rose 0.89 percent to 301.71. Buying in
special treatment shares, or companies that have posted two straight years of
losses, boosted the market Monday.
If companies in this category post losses for a third year, they are
delisted. "The absolute prices of special treatment stocks are low. That has
made them more enticing to investors," said Wu Jianxiong, an analyst at Guotai
Junan Securities.
Anhui Feicai Vehicle Co. rose 5 percent, the daily limit for special
treatment shares, to 1.79 yuan. Hunan Guoguang Ceramic Group Co. was also up its
5 percent limit, closing at 1.80 yuan.
Shares of companies that generate electricity from hydro, wind, and solar
power, also attracted large amounts of speculative funds.
"The market is crowded with speculators now. Many people are ignoring company
fundamentals to bet money on companies regarded as new or different on hopes
they will attract attention," said analyst Pei Xiaoyan at Joint Securities.
Baoding Tianwei Baobian Electric Co. surged 10 percent, the daily limit for
regular shares, to 11.39 yuan. Wuhan Linuo Solar Energy Group Co. also went the
limit to close up at 6.59 yuan.
With China's weeklong National Day holiday approaching, traders say trading
activity will decline in coming sessions.
China's stock markets will be closed during the period, which begins Oct.
1.
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