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1st LD-Writethru: Chinese shares rally on SOE reform plan

Xinhua, August 10, 2015 Adjust font size:

Chinese shares rallied across the board on Monday, with major indices surging during the afternoon session due to strong market expectations on the reform of state-owned enterprises (SOEs).

The benchmark Shanghai Composite Index jumped 4.92 percent to close at 3,928.41 points, while the smaller Shenzhen Component Index gained 4.31 percent to close at 13,302.96.

Total turnover of the two exchanges expanded to 1.23 trillion yuan (over 200 billion U.S. dollars), up substantially from 894.3 billion yuan the previous trading day.

Media reports said on Monday that the government has approved an ambitious plan to reorganize SOEs to improve their competitiveness in an increasingly liberalized market.

Listed companies of leading state-run giants rallied, with 19 firms rising by the 10-percent daily limit and many others rising sharply. COFCO Biochemical (Anhui) Co. finished 10.01 percent higher and Shanghai Electric Power Co. closed 8.6 percent higher from last Friday.

The good news even offset the impact from lackluster foreign trade data released over the weekend. It showed China's exports declined 8.9 percent and imports fell 8.6 percent year on year in July.

Across the two bourses, shares of more than 300 companies soared by 10 percent. Winners outnumbered losers by 932 to two in Shanghai and by 1,329 to four in Shenzhen.

Companies in shipbuilding, overseas projects, construction, securities and nuclear power also performed strongly.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, surged 5.03 percent to end at 2,706.72. Endi