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Law's approval propels shares higher
1/11/2005 13:45

Fu Chenghao/Shanghai Daily news

The approval of a newly-amended Securities Law, widely considered as an incentive for the stock markets, sent Chinese mainland shares to a higher close yesterday.
Confidence was also boosted by a more attractive compensation offered by the seventh batch of 18 companies involved in the national share reform, dealers said.
The 10 Shanghai-listed companies will offer compensation of an average 3.61 shares for every 10 held, the highest since the program started in April.
The shanghai Composite Index, which covers yuan-denominated A shares and foreign-currency B shares, surged 1.11 percent to 1,092.82. The A-share Index rose 1.11 percent to 1,148.88 while the B-share Index added 0.68 percent to 59.76.
The shenzhen Composite Index, which tracks the mainland's smaller bourse, closed up 0.86 percent at 265.39.
The law, passed by China's top legislature late last week, allows financial derivatives for the first time and permits select companies to have a diversified mix of banking, insurance and securities businesses.
Among other amendments, the State Council will be granted the final say on whether brokers are allowed to provide loans to investors and if state enterprises are allowed to trade shares on the stock market.
The amended law, to take effect from January 1, also encourages more funds flows into the market and includes articles on the setting up of a state fund for the protection of investors.
In yesterday's trading, petrochemical companies rose after news of PetroChina delisting three subsidiaries to turn them into private companies.
China petroleum & Chemical Corp rose 3.16 percent to end at 3.92 yuan (48 US cents) and Sinopec Yizheng Chemical Fiber Co surged to the 10 percent daily limit to close at 2.27 yuan.
Huaxia bank Co rose 1.89 percent to 4.31 yuan after posting a 58 percent rise in third-quarter profit on higher interest income.
Shanghai pudong Development Bank Co advanced 2.65 percent to close trading at 8.52 yuan.