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Chinese stocks jumped to a fresh seven-year high on Monday morning, led by infrastructure and transport stocks, after Beijing said it is seeking private funding for over $300-billion worth of public projects.
The National Development & Reform Commission (NDRC) on Monday unveiled the list of 1,043 so-called public-private partnership (PPP) projects on its Web site, in the latest effort by the government to reinvigorate China’s flagging economy.
“These PPP projects would be a boon to the infrastructure sector, which also benefits from China’s ‘One Belt, One Road’ initiative,’’ Zhang Chen, analyst at Shanghai-based hedge fund manager Hongyi Investment said, referring to Beijing’s ambitious overseas investment plan around Asia.
The CSI300 index rose 2.0 per cent to 5,051.83 points at the end of the morning session, while the Shanghai Composite Index gained 2.3 per cent to 4,765.69 points.
But Shenzhen’s growth board ChiNext dipped 0.3 per cent, after China’s securities regulator said after market close on Friday that it would strengthen a crackdown on share price manipulation.
“The regulator is mainly looking at the red-hot ChiNext for any potential price manipulation. So it’s natural for some investors to take profit on fears of the crackdown,’’ said hedge fund analyst Zhang.
“What we are closely monitoring is whether the revived interest in blue-chip stocks is sustainable.’’
Most sectors were firmer on Monday, with infrastructure, transport and industrial firms especially strong.
On ChiNext, several companies that have surged over the past year to astronomical levels, including Guangdong QTone Education Co and Beijing Baofeng Technology Co Ltd, slumped on concerns they could become the target of the regulatory crackdown on price manipulation.
The Hong Kong market was closed on Monday for an official holiday.
Cross-border investment scheme
Analysts expect that on resumption of trading, Hong Kong stocks would respond positively to a newly-announced cross-border investment scheme.
The China Securities Regulatory Commission had announced on Friday that funds domiciled in Hong Kong and China would be allowed to be sold in each others’ market starting July 1.
Hong Kong stocks would benefit more from the mutual fund recognition scheme because stocks there are relatively cheaper, analysts say.
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