Investors pile into defence stocks after South China Sea ruling
China also makes formal announcement of new national aircraft engine company
Investors ploughed into defence industry-related stocks in Hong Kong and the mainland markets on Wednesday, for the second day running, after an international tribunal court ruled on Tuesday against Beijing’s claims to contested areas of the South China Sea.
The boost to sentiment came as the government also announced the formation of a new national aircraft engine company, that will become the heart of the country’s future aerospace and defence ambitions.
China Aerospace International Holdings jumped 1.02 per cent to close at 99 HK cents, adding to a 3.2 per cent gain on Tuesday.
AviChina Industry & Technology gained 0.34 per cent to close at HK$5.87 after climbing 2.3 per cent in the previous session.
Shanghai-listed China Shipbuilding Industry rose 0.42 per cent to 7.23 yuan, extending its 0.4 per cent gain on Tuesday, while Shenzhen-listed Sainty Marine Corp gained 4.97 per cent to close at 10.13 yuan, after rising 5 per cent the day before.
The State-owned Assets Supervision and Administration Commission said in a notice published on Wednesday on its website that it had now approved government investment in the newly formed China Aerospace Engine Group.
