Chinese Stocks Rally to 3-Week High on Wednesday

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By Jacob Maslow

China’s markets rallied on Wednesday following two big announcements. Guotai Junan International Holdings Ltd. (HKG: 1788) announced that the company’s chairman, Yim Fung, will be rejoining the company after being absent for five weeks. The chairman was helping Chinese authorities with investigations into the company, and his return has alleviated much of the concerns that investors had in previous weeks.

Haitong Securities Co. (SHA: 600837) also help the markets rally after the company announced that it will not continue with its share buyback plan.

The Hang Seng China Enterprises Index rose 1.6% at close, while Guotai jumped to its highest level in seven weeks. Haitong Securities also reached a one-month high following the announcement.

Many oil companies also rallied on the day, including Petro China Co. (NYSE: PTR) and China Petroleum & Chemical Corporation (NYSE: SNP). The Shanghai composite did not do as well, falling 0.4% after rallying for two straight days.

Chinese brokerages suffered from the worst performances this year in Hong Kong, with Haitong Securities and Citic Securities Co. (SHA: 600030) both dropping as much as 28% this year. Haitong announced last month that the company was being pressured by Chinese authorities over alleged rule violations, but the allegations seem to be halted at this time.

The Shanghai composite has rallied over last quarter, up 19%.

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