Shanghai Zhixin Electric Co. led gains among Chinese power equipment makers in Shanghai trading after the government announced a plan to upgrade the power grid network in rural areas.
Zhixin rose as much as 8.4 percent to 18.15 yuan, the biggest intraday gain since May 13, and traded at 17.63 yuan at 10:54 a.m. local time. Baoding Tianwei Baobian Electric Co. gained as much as 3.5 percent to 24.24 yuan and was at 23.46 yuan. NARI Technology Development Ltd. was up as much as 3.9 percent to 73.99 yuan and traded at 72.09.
Chinese Premier Wen Jiabao said the government will fund an upgrade of power grids in rural areas during the next five years, according to a statement yesterday after the market closed. The government plans to invest about 300 billion yuan ($45 billion) in rural areas between 2010 and 2012, the Shanghai Securities News reported today, citing an unidentified person.
“The premier’s comment reinforced the market confidence in the sector,” Xu Chao, an analyst with Great Wall Securities Ltd., said by telephone from Beijing. “We expect major upgrades of the rural power grid network will be completed in the coming three years, with annual investment at about 60 billion yuan.”
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