China Stocks Hit 2-Year High on Rule Change
Just days before China’s biggest initial public stock offering, Chinese stocks rose to a two-year high Monday after the government announced rules allowing investors to borrow from brokerages to buy and sell shares.
The rules, unveiled over the weekend and scheduled to take effect Aug. 1, are aimed at luring more of the country’s $4 trillion in bank deposits into the markets as major IPOs occur, including a $2.5-billion stock offering by Bank of China, the biggest in the country’s history.
The news lifted the benchmark Shanghai composite index 1.5% to 1,697.28, its highest close since April 13, 2004. The Shenzhen composite index rose 1.6% to 440.13.
Bank of China begins trading Wednesday on the Shanghai Stock Exchange.