By P.R. Venkat
Chinese bank stocks rose after a state fund raised its stakes in the country’s four biggest banks, boosting hopes that Beijing will step up efforts to support the economy.
Shares of Industrial & Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China all opened higher Thursday after Chinese sovereign wealth fund Central Huijin Investment said it had boosted its stakes in these banks.
The four lenders’ shares, as well as stocks of other lenders, rose in mainland and Hong Kong trading.
In Hong Kong, CCB rose nearly 5.0%, Bank of China advanced 3.3% and ICBC gained 4.3%. In Shanghai, Zhejiang Shaoxing Ruifeng Rural Commercial Bank added 5.5% and Chongqing Rural Commercial Bank was up 3.0%.
In a filing late Wednesday, Bank of China said Huijin raised its stake to 64.03% from 64.02%. Huijin increased its ICBC stake to 34.72% from 34.71% and boosted its CCB stake to 57.12% from 57.11%.
Chinese and Hong Kong stock indexes have been trading higher in recent sessions on hopes for government stimulus to boost consumer confidence and spending.
China has been grappling with slower economic growth amid a prolonged downturn in the property sector and weak exports and consumer demand. Although there are signs of an uptick, many say Beijing needs to do more.
“The root causes of China’s current economic woes are more structural than cyclical and require policies well beyond just stimulus,” Nomura said in a note Thursday.
Nomura said the best policy package would be a mix of measures to bolster aggregate demand, efficiently allocate capital and boost the confidence of the private sector and foreign investors.
Write to P.R. Venkat at [email protected]
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