Hong Kong shares rocket as China eases trading

14-05-2007

Hong Kong shares rocket as China eases trading
Shares listed in Hong Kong rocketed to a record high in Monday's trading as China eased trading restrictions.

China's banking regulator said its corporate investors could now invest outside of the mainland for the first time, creating a surge in the price of shares for firms in neighbouring Hong Kong.

The Hang Seng index, which represents about 65 per cent of capitalisation of the Hong Kong Stock Exchange (HKSE), was up by 2.6 per cent to a record 20,990.62 points having topped 21,000 earlier in the day.

Chinese banks are now allowed to invest up to $13.9 billion (£7.01 billion) outside of the mainland.

"There's a bit of euphoria," said Andrew Sullivan, sales trading director at Daiwa Securities – one of Japan's largest securities broker firms.

"This has given the market the impetus to move above 21,000 points," he added.

China's relaxing of trading also boosted the wider Asian markets with Japanese car firm Toyota making some of its biggest gains in recent months, increasing share value by three per cent.

The biggest insurer in China, Beijing-based China Life Insurance, was also enhanced by the regulation changes and increased by 5.9 per cent to a share value of 26.05 Hong Kong dollars (£1.68).



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