Strong Monday performance for stocks

Huang Yixuan
Rises in indexes follow official approval of an amendment to the nation's Securities Law which has been hailed as a milestone in China's capital market reform. 
Huang Yixuan

China stocks performed strongly on Monday after an amendment to the nation's Securities Law was officially approved as a milestone in China’s capital market reform.

The benchmark Shanghai Composite Index jumped 1.16 percent to 3,040.02 points. The smaller Shenzhen Component Index also soared 1.29 percent to 10,365.96 points, while the blue chip CSI300 index closed 1.48 percent higher at 4,081.63 points.

The revised Securities Law will go into effect on March 1, 2020, which made clear the regulation details in securities issuance and trading, the takeover of listed companies, information disclosure as well as investor protection.

According to the law, China will comprehensively adopt the registration system and lower the standard for public debt issuance, which can bring benefits to securities companies in various businesses such as wealth management and investment banking, said Liu Xinqi and Gao Chao, both analysts at Guotai Junan Securities.

Another highlight was the large increase in the cost of irregularities in the securities sector, with much higher penalties for illegal activities. Meanwhile, the new Securities Law also clarifies the civil compensation for securities violations and further optimizes provisions on banning entry into the securities market.

"The newly added chapter on information disclosure and investor protection in the Securities Law will help raise the confidence of investors in the market," according to BOC International. "At the same time, a significant increase in the level of punishment for illegal acts will effectively reduce irregularities and purify the market ecology, thus promoting the long-term healthy development of the capital market."

Turnover on the two major bourses totaled 611 billion yuan (US$87.46 billion), shrinking from the previous session's 632 billion yuan.

Brokerages led the rise, with Founder Securities, SDIC Capital Co and CITIC Securities Co all surging by the daily limit of 10 percent.

The liquor sector was also among the biggest gainers. Anhui Gujing Distillery Co skyrocketed by the maximum 10 percent, and Jiangsu King’s Luck Brewery Joint Stock Co advanced over 9 percent.

Building material firms, the papermaking sector, and petrochemical shares all posted strong gains.

On the SSE STAR Market, stocks of 21 listed companies performed well, one remained flat, while the other 48 posted declines.

Special Reports