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Tibetan aid package fuels record Shanghai close

By Fu Chenghao (Shanghai Daily)
Updated: 2007-03-28 10:23

Shanghai's benchmark stock index closed at a record high yesterday asTibet-related stocks gained after China announced a huge budget to boost the under-developed area.

Related readings:  Investors open 4.7m new accounts in 2 months  Stocks are set for record close  Tibet to benefit from investment boost China announces investment drive in Tibet

Yesterday's gain was offset by bank stocks after investors cut holdings in this sector over concerns that they are too expensive, dealers said.

The Shanghai Composite Index, which tracks yuan-denominateA sharesand hard-currencyB shares, closed 0.51 percent higher at 3,138.83, in its seventh straight winning session.

Tibet-related stocks rose after it was reported that China will invest 100 billion yuan (US$12.9 billion) by 2010 in the remote region.

The money will be used in 180 projects, including an extension of Tibet's first railway, upgrading an airport and extending coverage of drinking water, electricity and telephone lines.

Tibet Tianlu Communications Co, a highway and bridge builder, surged the 10 percent daily limit to 12.82 yuan. Tibet Shengdi Co, which is engaged in the travel industry, soared 9.46 percent to 14 yuan.

Tibet Rhodiola Pharmaceutical Holding Co climbed 4.12 percent to 20.49 yuan.

"Investors usually give a strong response to such positive policy when the market sentiment is good," said Xu Yinhui, an analyst at Guotai Jun'an Securities Co. "Funds continue to flow into the market."

A Shenyin Wanguo Securities analyst said the Shanghai index could keep rising, albeit at a slow pace. The index eclipsed the 3,100 mark for the first time on Monday.

Ningbo Bird Co rose 1.63 percent to 6.23 yuan after the leading Chinese handset maker reported a fourth-quarter profit. Shanghai International Port (Group) Co jumped 9.8 percent to 9.41 yuan.

Shanghai Pudong Development Bank Co declined 2.01 percent to 25.31 yuan.