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China: Stocks head for second week of gains on monetary bets
[SHANGHAI] China's stocks rose, sending the benchmark index toward a second week of gains, as the prospect of more monetary stimulus overshadowed concern a flood of new share sales will divert funds from existing equities.
Gemdale Corp. jumped 3.2 per cent as a measure of real- estate shares headed for a record after home sales soared 30 per cent last month. Shanghai Waigaoqiao Free Trade Zone Development Co rallied 10 per cent after the Shanghai Securities News reported that the city's Pudong district will restructure more than 10 SOEs in a new round of reform. Bright Dairy & Food Co. led gains for consumer-staples producers as the stock jumped for a fourth day.
The Shanghai Composite Index added 0.6 per cent to 5,150.68 at 9:45 am, taking this week's advance to 2.5 per cent. Data this week showed parts of the economy stabilizing as factory output and credit growth accelerated in May, while exports and producer prices slid. The People's Bank of China may cut banks' reserve-requirement ratios as early as this weekend, according to China Merchants Bank Co.
"We remain of the belief that more loosening is coming," Douglas Morton, London-based head of Asia research at Aviate Global LLP, wrote in a report.
The China Securities Regulatory Commission has approved 24 new share sales, according to a statement released Tuesday. Subscriptions for 25 A-share initial public offerings including Guotai Junan Securities Co may tie up 6.68 trillion yuan of liquidity starting mid-June, according to the median estimate of 6 analysts surveyed by Bloomberg.