China stock market tops $1 trillion on rally, sales
By Zhang Shidong (Bloomberg)Updated: 2007-01-26 11:31
Stronger Yuan
A stronger yuan has prompted investors to chase property stocks as it lures speculative money to the real estate market, which can offer higher yields than bank deposits. A strengthening yuan boosts the returns on dollar-based investors.
The yuan has gained 3.9 percent since the central bank ended a decade-old link to the dollar on July 21, 2005. The yuan climbed to as high as 1.0001 per Hong Kong dollar, and advanced 0.17 percent to 7.7943 to the U.S. currency at 3:05 p.m. in Shanghai, the biggest gain in six weeks, according to data compiled by Bloomberg.
Shares of China Vanke Co., the nation's biggest property developer, more than tripled last year.
Newly listed lenders have also helped drive gains in the index. ICBC, the country's biggest lender and the largest constituent of the Shanghai index, has gained 73 percent since its debut on Oct. 27. It raised 46.6 billion yuan ($6 billion) in the world's biggest initial public offering last year.
Bank of China Ltd., the country's second biggest, has advanced 35 percent since its first day of trading on July 5, after raising 20 billion yuan selling domestic shares for the first time.
China Life Insurance Co., the nation's biggest insurer; Air China Ltd., the country's biggest international airline, and Guangshen Railway Co., China's second-biggest publicly traded rail operator, were also among those companies that returned to the home market after first selling stock in Hong Kong.
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