Companies based in Xinjiang experience surging stocks, outperforming China's overall economy with notable growth.
Xinjiang Stocks Surge Ahead of Mainland China's Market
Investor optimism about the growth prospects of listed companies based in Xinjiang, a resource-rich region, is on the rise. This optimism is reflected in the remarkable performance of Xinjiang-based stocks, which have outperformed the mainland China's market this year.
As of Friday, a gauge of 61 Xinjiang-based listed companies has added a 26% gain to its value, surpassing the 16% gain for the CSI 300 Index, a broader market index. This surge in Xinjiang stocks is partly attributed to speculation about potential policy support and the prospect of building an artificial intelligence data center in the region.
The unique characteristics of Xinjiang stocks, including their abundance of natural resources and special status, make them suitable for thematic trading. Companies like Xinjiang Communications Construction Group, Xinjiang Tianfu Energy, and Bona Film Group have seen significant gains. Xinjiang Communications Construction Group increased by 10% to 17.49 yuan in Shenzhen trading, while Xinjiang Tianfu Energy, a thermal power generator, increased by 10% to 8.67 yuan in Shanghai trading. Bona Film Group, a movie producer and distributor, also saw a 10% increase to 6.25 yuan.
Notable gains have also been seen by major publicly listed companies from the Xinjiang region, such as electrical component maker TBEA and cement maker Tianshan Materials. The major players, including Xinjiang Bai Hua Cun Co Ltd and Xinjiang Communications Group, have seen a stock price increase of around 26% since the beginning of the year. Goldwind Science & Technology, a Xinjiang-based wind energy firm, also shows strong interest, although the exact annual increase is not specified.
Xinjiang's economy expanded by 5.7% in the first half, surpassing mainland China's overall 5.2% growth. This economic growth, rivalling that of the fastest-growing provinces, is a significant factor in the surge of Xinjiang stocks.
Dai Ming, a fund manager at Huichen Asset Management in Shanghai, stated that Xinjiang stocks are a unique sector due to the region's abundance of natural resources and special status, making them suitable for thematic trading because of the prospect of policy support. The trading fervor underscores this investor optimism about the growth prospects of Xinjiang-based listed companies.
Speculation of an artificial intelligence data center being built in Xinjiang, driven by its vast land and low power rates, has also contributed to the gains in Xinjiang stocks. As this development unfolds, it is expected that these listed companies will continue to benefit from the region's above-national-average economic growth.
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