China Stocks Rise for 5th Week on Stimulus Speculation

China’s stocks rose, sending the benchmark index to a fifth week of gains, amid speculation the government will take further steps to support the economy. Technology and financial companies led gains.

Shenzhen Laibao High-Technology Co. jumped 5.6 percent as a gauge of technology stocks extended the biggest advance among industry groups this week. Citic Securities Co. and Haitong Securities Co., the biggest listed brokerages, climbed at least 1.4 percent. TCL Corp., the largest publicly traded consumer-electronics maker, surged 9.9 percent after announcing a private-placement plan as net income jumped 91 percent.

The Shanghai Composite Index rose 0.9 percent to 2,226.73 at the close, the highest level since Dec. 10. The measure added 1.5 percent in the past five days and posted the longest stretch of weekly gains since May 2013. Chinese stocks climbed this week after data showed inflation was subdued last month, while weaker-than-estimated credit growth and industrial production boosted speculation the government will ease monetary policy.

“A cut in the reserve-requirement ratio or the interest rate is likely in the near future,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “A loosening of policies is what the market wants now.”

The CSI 300 Index rose 1.1 percent to 2,360.64. The Hang Seng China Enterprises Index climbed 0.4 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.- listed Chinese companies, retreated 0.6 percent yesterday.

A measure tracking technology stocks surged 2.5 percent this week, the most among the CSI 300’s 10 industry groups. Shenzhen Laibao jumped the most since Feb. 14. Neusoft Corp. added 3.3 percent.

Rate Speculation

Citic Securities, the nation’s biggest listed brokerage, rose 2.3 percent. Haitong Securities Co., the second largest, climbed 1.4 percent. Poly Real Estate Group Co. led gains for developers, rising 1.8 percent. Gemdale Corp. added 0.8 percent.

TCL surged to the highest since March 26. The electrical appliance maker said it plans to raise 5.7 billion yuan ($927.2 million) in a private stock placement to fund a TFT-LCD production line and to replenish working capital.

China may adopt targeted interest-rate cuts for shanty-town redevelopment, the agriculture sector and small companies, according to a front-page commentary today in the China Securities Journal.

“A rate cut is still needed as real interest rates remain elevated, hindering economic recovery,” analysts led by Mao Junhua at China International Capital Corp. wrote in a note today. Barclays Plc is forecasting two second-half interest-rate cuts, while Australia & New Zealand Banking Group Ltd. said a reduction in banks’ reserve requirements is imminent.

The Shanghai Composite is valued at 8.2 times 12-month projected earnings, compared with the five-year low of 7.3 in March, according to data compiled by Bloomberg. Trading volumes in the index were 3.5 percent below the 30-day average.

— With assistance by Shidong Zhang

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