Nov. 9 (Bloomberg) -- China International Travel Service Corp. led gains by travel agencies in Shanghai trading on speculation the government may soon announce incentives designed to bolster Hainan province as a tourist destination.

China International Travel rose by the 10 percent daily limit to 18.93 yuan as of 11:38 a.m. local time, heading for the highest close since its Oct. 15 trading debut. Beijing Capital Tourism Co. gained 3.3 percent to 19.50 yuan and China United Travel Co. increased 1.8 percent to 5.54 yuan. The benchmark Shanghai Composite Index fell 0.2 percent.

The State Council, China’s cabinet, may soon approve a plan to make Hainan, an island in the south, an international travel destination, the China Securities Journal reported Nov. 6. Incentives may include lower luxury-goods taxes, said Zeng Guang, an analyst at China Jianyin Investment Securities Co.

“The Hainan plan may boost demand for travel, which in turn may lead to better earnings for China International Travel and other travel agents,” said Zeng, who rates China International Travel’s shares “buy.” “Speculation that the plan may be approved soon is helping pull up tourism shares.”

For Related News and Information: Find stories about Hainan: NSE HAINAN IN WIRE: BN <GO> Find stories about tourism in China: TNI CHINA LEI BN <GO> Most-read stories about China today: MNI CHINA 1D <GO> China economic statistics: ECST CH <GO>

Last Updated: November 8, 2009 22:50 EST