SHANGHAI stocks advanced the most in nearly one month after news reports said China's top securities regulator has restarted issuing investment quota to foreign institutional investors after a suspension in February and March.
The benchmark Shanghai Composite Index increased 2.14 percent, or 47.04 points, to settle at 2,244.64 points. Daily turnover was 95.4 billion yuan (US$15.4 billion). The index gained 1.72 percent for the week, snapping a three-week losing streak.
The China Securities Regulatory Commission and the State Administration of Foreign Exchange have resumed taking quota applications for investment under the Renminbi Qualified Foreign Institutional Investors (RQFIIs) scheme, the 21st Century Business Herald reported today, citing unnamed sources with Bosera Asset Management.
Chinese regulators have yet to approve RQFII quotas to authorized investors since January 24. With an untapped quota of 200 billion yuan, analysts said the reboot of approvals will help boost the market liquidity.
Market sentiment was also lifted by media reports saying that Chinese regulators have discussed with MSCI index managers about adding A shares into the MSCI Emerging Markets Index.
"The news reports indicated the regulators are seeking to boost foreign appetite for A shares and lifted investor expectation over the long-term market liquidity," Citic Securities said in a note today.
The addition of A shares into MSCI index is expected to bring about 1 trillion yuan for China's stock market, the broker said.
Brokerages surged. Citic Securities, the biggest listed brokerage, jumped 5.5 percent to 12.82 yuan. Founder Securities Co leapt 8.9 percent to 7.24 yuan. Haitong Securities Co rose 4.4 percent to 10.91 yuan.
Shanghai Waigaoqiao Free Trade Zone Development Co surged by the daily limit of 10 percent to 15.47 yuan after the government of Shanghai's Pudong New Area said yesterday that it will accelerate preparation to build the bonded zone into China's first free trade zone.
Shanghai Jinqiao Export Processing Zone Development Co advanced 3.9 percent to 8.57 yuan. Shanghai Zhangjiang Hi-Tech Park Development Co increased 2.4 percent to 6.44 yuan.
Gold stocks gained among non-ferrous metal producers as gold price rebounded. Zijin Mining Group Co, the nation's largest gold producer, rose 2 percent to 3.19 yuan. Zhongjin Gold Corp gained 2.8 percent to 12.64 yuan.