Nov. 17, 2009 (Xinhua News Agency) -- China Stock Market Policy Scan -- November 18
BEIJING, Nov.18 (Xinhua) -- China stock market policy scan on Nov.18, as follows:
1. China and the United States singed a joint statement Tuesday after talks between Chinese President Hu Jintao and his U.S. counterpart Barack Obama, agreeing that "the transition to a green and low-carbon economy is essential."
The two countries agreed to build partnership in the area of renewable energy and signed a memorandum of understanding in energy cooperation.
Comment: cooperation between China and the U.S. in clean energy is expected to make stocks with low carbon economy concept a long-term hotspot on the stock market.
2. China Securities Regulatory Commission (CSRC), the securities regulator, is expected to ease the approval for new fund issuance next year, according to a report by China Business News (CBN).
CSRC will create more channels for the approval of new funds, and allow a fund management firm to apply for the issuance of five new funds at a time, CBN quoted an unnamed industry insider as saying.
Currently, fund management companies are allowed to apply for three new issues at a time. Comment: the move, aimed at making the approval of new fund issuance more market-oriented, will help inject new capital into the stock market, providing driving force for the stock market in the future.
3. China is likely to renew the policy incentives for automobile consumption, Shanghai Securities News Wednesday quoted an insider as saying.
The Ministry of Commerce is considering raising the subsidy for the swapping of old vehicles for new ones and continuing with the automobile purchase tax cut.
The current cut of the purchase tax on cars with engines under 1.6 liters by half may be extended to cars with engines under 2.0 liters, the report said.
Comment: the news raises expectation for new stimulus on automobile consumption and will help lift automobile stocks.
5. China plans to allocate 20 billion yuan of subsidy for the photovoltaic power industry in the next two to three years, according to a report by the 21 Century Business Herald Tuesday.
Comment: the news will benefit listed companies in the photovoltaic power industry.
6. The Ministry of Land and Resources and the National Development and Reform Commission recently jointly released the new rules on restricting the land use, China Securities Journal reported Wednesday.
The new rules restricted the land use by industries with overcapacity. New coal plant with less than 300,000-ton annual capacity will not be granted with new land.
Comment: the new rules in effect raise the access threshold of coal industry, which will benefit existing large coalmines. Coal shares will benefit from the news.
7. A public hearing on the household water price adjustment in the capital city of Beijing will be held soon, said the Beijing Municipal Commission of Development and Reform Tuesday on its website.
Comment: voices for domestic water price hike in Beijing have been strong since last year. The city has never raised the price since it announced a raise of 0.8 yuan/ton, that is, from 2.9 yuan/ton to 3.7 yuan/ton, in 2004. The news will raise expectation for water price hikes in other cities, producing a positive impact on water supply stocks as a whole.
