Shanghai shares extend rally, led by gains of film companies and telecommunication firms
Shanghai stocks closed up again today as film companies and telecommunication firms rose.
The Shanghai Composite Index edged up 0.37 percent to close at 3,559.47 points.
Shares of film producers and publishing companies gained the most today after investors turned optimistic following a UBS Securities report yesterday that China’s film industry has potential to grow steadily from 2018 to 2020.
“We expect short-term momentum to be stable as cinema remains the dominant channel for movie consumption in China and China’s box office performance in 2017 beat our expectations,” said Liu Zhijing, Media and Internet analyst at UBS Securities
“Given the increasing popularity of domestic films, we think local distributors with both online and offline distribution capabilities are better positioned," Liu added.
Hengdian Entertainment Co Ltd surged by the daily limit of 10 percent to 33.88 yuan (US$5.30), Chinese Universe Publishing And Media Co Ltd jumped 7.31 percent to 17.76 yuan and Shanghai Film Co Ltd rose 5.06 percent to 22.44 yuan.
Investors also pushed shares higher in the telecom sector after the Ministry of Industry and Information Technology said today the government will continue to support and encourage private funds to invest in the sector. The ministry said it will further encourage innovation in business model and services in the telecom sector, as well as further promote healthy and high-quality development of the industry.
Fiberhome Telecommunication Technologies Co Ltd added 3.30 percent to 28.80 yuan and Hangzhou Freely Communication Co Ltd climbed 2.17 percent to 48.11 yuan.
Market sentiment also improved after the People’s Bank of China again injected a net liquidity of 220 billion yuan into the financial market via reverse repurchase agreements, according to a statement published on its official website today.