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Investors cheered Chinese President Xi Jinping’s plans for a new development area in the province of Hebei, south of Beijing, lifting a series of related stocks to the daily limit on the Shenzhen and Shanghai stock exchanges.
The new 100 square kilometre area named as the Xiong’an New Area, is 100km southwest of Beijing and is designed to advance the development of the Beijing-Tianjin-Hebei region, according to state news agency Xinhua. It will be expanded to become a 2,000 square kilometre area in the long-term.
Mr Xi’s plans follow on from those of his predecessors Deng Xiaoping and Jiang Zemin, who established the Shenzhen Special Economic Zone and the Shanghai Pudong New Area, respectively.
The Shanghai and Shenzhen bourses were closed on Monday and Tuesday for a holiday, making today the first opportunity to cash in on the new area, with a number of construction and property-related companies jumping to the daily limit.
Hebei state-owned bulldozer manufacturer Xuanhua Construction Machinery, was up 10 percent at its daily limit in Shenzhen at Rmb27.50 ($3.99) a share while excavating equipment maker Jikai Equipment Manufacturing rose limit-up to Rmb27.54 a share.
Hebei developer Risesun Real Estate development surged to Rmb9.59 a share as Iron pipe maker Xinxing Ductile Iron Pipes, which manufactures pipes for water and gas, jumped to Rmb5.98 a share. Jizhong Energy Resources, which generates electricity, produces and markets coal products as well as manufacturing cement, rose to Rmb7.37 a share.
Hong Kong-listed BBMG Corp surged by as much as 20 per cent on Wednesday in Hong Kong after closing up 34.7 per cent on Monday. The company’s Shanghai-listed shares jumped limit-up to Rmb5.13 a share.
Some companies based in the province that do not appear to have any link to construction also jumped, with Shanghai-listed ENN Ecological Holdings, a pesticides and chemicals manufacturer, also seeing a limit-up rise to Rmb15.87 a share.