An investor smiles before an
electronic board showing stock information at a securities firm in Xiamen,
East China's Fujian Province March 20, 2007. [newsphoto]
China's benchmark stock index Tuesday hit new highs for the eighth
consecutive session on bullish investor confidence, strong growth in corporate
earnings, and return of funds after failing to procure new shares.
The Shanghai Composite Index, the most widely watched indicator of the
mainland stock market, ended 50.93 points higher at 3,495.22. The index has
grown 30.64 percent this year after surging 130 percent last year.
The Shenzhen Composite Index, which tracks the smaller of the mainland's
bourses, gained 1.05 percent to 928.28 while the Shanghai and Shenzhen 300 index
of major companies rose 1.28 percent to 3121.14.
The rise came as listed companies posted strong earnings. As of Tuesday, more
than 821 firms have released their annual report in 2006, registering an average
of 38.18 percent growth in net profit, statistics showed.
China Petroleum & Chemical Corp. better known as Sinopec, Tuesday
reported a 30 percent rise in net profit in 2006 on strong domestic fuel demand
and weaker crude oil prices.
The net profit of Asia's largest refiner by capacity totaled 53.9 billion
yuan ($7 billion) in 2006, up from 41.5 billion yuan in 2005.
The repeated hitting of new highs also found strength from the bullish
sentiment of the Chinese investors who threw themselves into lines to open
accounts at securities firms.
A record high of 194,513 A-share accounts were opened Tuesday, breaking the
record of 188,477 set just the previous day, according to statistics from the
China Securities Depository and Clearing Corporation Limited.
Tuesday represented the 22nd day in a row that saw the opening of more than
100,000 accounts. That compared with an average of 4,700 newly added accounts
each day in 2005 when the market was in a bearish run.
Tuesday also witnessed the opening of nearly 36,000 fund accounts after an
addition of 30,000 on Monday. By 3:00 pm Tuesday, the number of accounts in the
Shanghai and Shenzhen stock exchanges has topped 88.45 million, according to the
The stocks were boosted by money returned to investors who failed to obtain
shares in five small caps launched last week. A total of 1.024 trillion yuan
were frozen, earlier reports said, including 950 billion yuan from retail
investors, a record high for the amount of frozen retail investor capital.
Financial share performed well. China Merchant Bank surged 6.28 percent to
19.13 yuan while China Life gained 2.83 percent to 37.17 yuan.
Other big caps also staged strong performance. Sinopec rose 7.1 percent to
11.32 yuan and Huaneng Power International grew 5.47 percent to 10.22 yuan.
China Vanke, the country's largest publicly traded property developer, posted a
6.58 percent growth to 18.63 yuan.
Trading in Shanghai also reached a record high of 156.208 billion yuan while
turnover in the Shenzhen Stock Exchange stood at 82.512.