Stocks linked to Xiongan New Area rally in China as Vice-Premier hints projects set to start

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Vice-Premier Zhang Gaoli says with planning framework complete some projects should start soon

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Aerial view of a village in Baiyangdian, one of the largest freshwater wetlands in the northern Chinese province of Hebei. The Xiongan New Area, officially announced on April 1, 2017, will span Xiongxian, Rongcheng and Anxin counties and will eventually cover 2,000 square kilometres. Photo: Xinhua

Zhang Shidongin Shanghai

Published: 1:01pm, 3 Jan 2018Updated: 10:55pm, 3 Jan 2018

Stocks linked to the Xiongan New Area economic zone outside Beijing that was hand-picked by President Xi Jinping added momentum to a rally in Chinese equities on expectations the state will soon embark on big projects in the area.

Companies based in Beijing and the northern province of Hebei ranging from cement maker BBMG Corp and property developer China Fortune Land Development surged at least 6 per cent in Shanghai trading on Wednesday.

In a meeting chaired by Vice-Premier Zhang Gaoli a day earlier, he said the planning framework for the Xiongan New Area is “basically mature”and that some projects would be started in due time.

The rally in the so-called Xiongan concept stocks adds to a broad-based gain on the broader market since trading in the new year began on Tuesday.

The Shanghai Composite Index closed 0.6 per cent higher on Wednesday, extending a gain of 1.2 per cent a day earlier.

The Xiognan New Area, which was created last year under direct orders from Xi, consists of three counties in Hebei province and will take over some secondary functions from Beijing to alleviate the traffic and population pressure in the Chinese capital.