Business / Markets

Stocks rally as sentiments get a lift

By WU YIYAO in Shanghai (China Daily) Updated: 2016-02-23 03:58

Stocks rally as sentiments get a lift

Investors check stock prices at a securities brokerage in Huaibei, Anhui province, Feb 22, 2016. [Photo/IC]

China's stocks rallied by more than 2 percent on Monday to the highest level in almost a month. More than 2,000 shares gained as investors' sentiment rose after the nation's securities regulator installed a new chairman over the weekend.

Analysts and investors alike have high expectations that the securities regulator's new chief, Liu Shiyu, a veteran banker, will help to speed up market reform and perfect market laws.

The State Council, China's Cabinet, appointed Liu as chairman of the China Securities Regulatory Commission, removing Xiao Gang from the post.

Analysts had expected that a new chief for the stock market regulator would lift sentiments of China's investors, especially small ones, and Monday's market rally was an immediate reflection of this.

The benchmark Shanghai Composite Index rose by 2.35 percent to 2,927.18 points on Monday, while the Shenzhen Component Index climbed by 2.1 percent to 10,370.99 points.

The combined transaction volume of Shanghai and Shenzhen expanded to 602 billion yuan ($92.28 billion), up 25.16 percent from Friday's 481 billion yuan. The CSI 300 Index advanced by 2.2 percent to 3,118.87 as of closing.

In Hong Kong, Bank of East Asia jumped by 9.2 percent to the highest level since Jan 8 after Chairman David Li bought 110,000 shares, while China Unicom Hong Kong climbed by 3.1 percent after adding 5.17 million mobile subscribers in January, Bloomberg News reported on Monday.Ren Chengde, an analyst with China Galaxy Securities, said that newcomer Liu might bring confidence to investors.

"Liu may raise investors' expectations for further market reforms, which is positive for stock market performance," said Ren.

Peng Jia, a 33-year-old in Beijing who has invested in stocks for 10 years, said he hopes the new chairman can lead the CSRC to strengthen delisting regulation and crack down on illegal activities.

Deng Haiqing, chief economist at JZ Securities Co, said improving conditions in global stock markets and replacement of the CSRC chairman were both positives for the A-share market performance on Monday.

Hong Hao, chief strategist at securities and asset management firm BOCOM International Holdings in Hong Kong, said in a note that Liu needs to implement the IPO registration system, perfect the securities law against market manipulation and improve company disclosures.

Cai Xiao in Beijing contributed to this story.

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