China's Stocks Jump on Support Pledge as Deals Spur Developers

  • It's too early for rescue fund to leave, CSRC chief Liu says
  • China Overseas, Vanke rally after unveiling asset purchases

Chinese stocks climbed the most in more than a week after the new head of the securities regulator signaled he will keep propping up the equity market and developers announced acquisitions.

The Shanghai Composite Index advanced 1.8 percent, with more than 50 shares rising for each one that fell. China Vanke Co. jumped the most in more than a year in Hong Kong after saying it plans to pay as much as 60 billion yuan ($9.2 billion) for a stake in Shenzhen’s urban transit company. China Overseas Land & Investment Ltd. climbed to the highest close this year after saying it’ll acquire Citic Ltd.’s property assets.

Liu Shiyu, chairman of the China Securities Regulatory Commission, said it was too early to think about the state rescue fund leaving the market, while a new registration-based system for IPOs would take time. Data over the weekend showed the nation’s industrial production and retail sales both grew less than economists forecast in the first two months of 2016, while China’s broadest measure of new credit for February came in less than half of the estimate in a Bloomberg survey.

“Liu’s vow to help with the market’s recovery brought back some investor confidence,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. The economy is still looking “poor,” he said.

State Support

The Shanghai Composite rose to 2,859.50 at the close. The ChiNext Index of smaller companies jumped 4.6 percent, the most in six weeks. The Hang Seng China Enterprises Index climbed 1.5 percent in Hong Kong, while the Hang Seng Index advanced 1.2 percent.

Liu vowed to step in “decisively” if needed to curb panic and defended intervention following last summer’s $5 trillion selloff. Trading on the world’s second-largest stock market tumbled last week to the lowest level since 2014 as margin traders unwound bullish positions despite suspected state support for equities. China’s benchmark gauge has lost 19 percent this year, still the most among 93 global benchmark indexes tracked by Bloomberg.

Vanke surged 10 percent. It signed a memorandum of understanding with Shenzhen Metro Group Co. to acquire a stake in a unit for an estimated 40 billion yuan to 60 billion yuan, the firm said Sunday, in a move that will make the transit company a large shareholder.

Industrial Output

China Overseas Land gained 1.8 percent after saying it will pay about 31 billion yuan for residential assets held by Citic, China’s biggest conglomerate. Citic has been seeking to unlock value from its land portfolio over the past year.

Industrial output rose 5.4 percent from a year earlier in January and February, the National Bureau of Statistics said Saturday, compared with the 5.6 percent median estimate of economists surveyed by Bloomberg. Retail sales climbed 10.2 percent from a year earlier, missing the 11 percent projected gain in the survey, while fixed-asset investment exceeded estimates with a 10.2 percent increase.

Aggregate financing was at 780.2 billion yuan in February, according to a report from the People’s Bank of China on Friday, compared with the median forecast of 1.84 trillion yuan in a Bloomberg survey. New yuan loans were 726.6 billion yuan, compared to the estimate of 1.2 trillion yuan.

A gauge of technology companies rallied 3.8 percent, the biggest gain among industry groups on the CSI 300 index, which increased 1.6 percent. Searainbow Holding Corp. and Hundsun Technologies Inc. soared by the 10 percent daily limit. Industrial and consumer-discretionary share sub-indexes added at least 2.6 percent.

MTR Corp. advanced 2.8 percent after Hong Kong lawmakers approved additional funding for an express rail link to the mainland and the company’s profit in 2015 topped estimates.

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