SHANGHAI, Oct 20 — Traders are snapping up stocks with Shanghai in their name after the city’s Communist Party chief confirmed plans to set up a free-trade port that would aim to ease restrictions for incoming cargo.
More than half of the top 20 gainers on the city’s equity gauge were companies whose names began with the word Shanghai, nine of which surged by the daily limit.
Port operator Shanghai International Port Group Co and property developer Shanghai Waigaoqiao Free Trade Zone Group Co were among the shares that soared 10 percent.
Shanghai is preparing for a free-trade port in line with central government guidelines, the city’s Communist Party chief Han Zheng said yesterday at the 19th Party Congress after the mainland equities market closed.
The initiative is in its planning stages and requires approval before implementation, he said.
"Han Zheng’s remarks on Shanghai building a free trade port are lifting sentiment for shares of local firms, as the plan will bring more opportunities for local businesses," said Wang Chen, a Shanghai-based partner at Xufunds.
“Expectations for Shanghai to accelerate restructuring of local state-owned enterprises after the 19th Party Congress also spurred buying."
The share moves echo a frenzy in 2013, when the approval of the city’s free trade zone sparked a boom in shares with Shanghai in their name.
More recently, equities soared when investors caught wind in April of the government’s plan to develop a new economic zone in China’s Xiongan region near Beijing. — Bloomberg