SHANGHAI Oct 11 China stocks advanced to a
one-month high on Tuesday as Beijing's plan to cut massive
corporate debt triggered bets on mergers and restructuring among
listed state-owned companies.
The blue-chip CSI300 index of the largest listed
companies in Shanghai and Shenzhen rose 0.4 percent to 3,306.56
points, while the Shanghai Composite Index gained 0.6
percent to 3,065.25.
Investors welcomed guideliness issued by China's cabinet on
Monday to reduce rising corporate debt, which will include
encouraging mergers and acquisitions, bankruptcies,
debt-to-equity swaps and debt securitisation.
"For such a plan to be successful, you need a vibrant equity
market," said Yang Hai, analyst at Kaiyuan Securities.
Investors are now betting that consolidation among
debt-laden state-owned companies will accelerate.
China's major listed shipbuilders, including CSSC Offshore &
Marine Engineering Group Co, China Shipbuilding
and China CSSC Holdings surged on
expectations that their state-owned parents will merge.
Also reflecting growing interest in state sector
restructuring, shares of China United Network Communications
jumped 10 percent, rising for a second day after
saying over the weekend that its parent company is studying
plans for "mixed ownership" reforms.
Banking is the only main sector that fell on Tuesday, as
investors believe Beijing's debt-to-equity plan would weaken
lenders' balance sheets.
(Reporting by Samuel Shen and John Ruwitch; Editing by Kim