China’s stocks experienced the biggest 2-day gain within the span of last 7 weeks as the economic prospects of this Asian powerhouse spurred the fund inflows. The benchmark gauge Shanghai Composite Index increased by 0.9% on today and has gone to 2347.18 at the time of closing. On yesterday, the gauge had a surge of 2.3% as well, thanks to the Government’s announcement of higher fiscal spending targets during the National People’s Congress’s first day. The CSI 300 Index increased by 1% and is at 2650.20 now. On the other hand, the Hang Seng China Enterprises Index went ahead by 1.8%.
According to the Analyst of Dongxing Securities Co., Liu Guangming, after the National People’s Congress, investors now have high expectations for some reformation measurements. It is also expected that the Chinese economy will stay quite stable, at least in the 1st half of 2013. In this year, Shanghai gauge is up by 3.4% and is currently being traded at 9.7 times of its projected 12-month earnings. Incidentally, the price to earnings ratio of last 12 months for the MSCI Emerging-Market Index is 10.3 times. On today, the trading volume in China was 10% less than the average of last 30 days.
The Chinese Government has already announced that the economic growth target of the same will be kept at 7.5% for 2013, similar to that of 2012. However, it expects 10% jump in fiscal spending for funding different areas including the health care. Incidentally, in 2012, the economy expanded by 7.8%, its weakest pace in last 14 years.
On 4th March, the property gauge of China declined by 9.3%. However, on today, it has gained 1%, thereby extending its winning streak to a couple of days. The biggest developer in China, Vanke, saw its shares increasing by 2.4% and each share is currently priced at 11.15 Yuan. Its rival Poly Real Estate Group Co., on the other hand, surged ahead by 0.9% and each share costs 11.35 Yuan now.
The 2nd largest maker of telephone equipment in the world, ZTE experienced an increase of 10% as each of its shares moved up to 10.86 Yuan. It also moved ahead by 8.3% in Hong Kong. The company has announced its collaboration with Intel Corp. in an attempt to make the next generation smartphones. Goertek Inc., a supplier to Apple, rose by 6.2%.