China’s two biggest railway builders jumped in Hong Kong trading today on an HSBC Holdings Plc report that the Chinese government will increase railway investment by at least 23 percent to support economic growth.
China Railway Group Ltd. (390) surged as much as 11 percent, the biggest gain in more than two years. China Railway Construction Corp (1186) gained as much as 8.4 percent. The city’s benchmark Hang Seng Index rose 0.6 percent.
China Railway Corp., the state monopoly that owns the train network, said April 30 that the investment budget for this year will be boosted to 800 billion yuan ($128 billion) from a previous spending plan for 630 billion yuan to 650 billion yuan, HSBC analysts led by Lesley Liu said in a note yesterday. The Chinese government last month outlined a package of measures including tax relief and railway spending as a slowdown endangered its 7.5 percent economic growth target.
CHINESE RAILWAYS has confirmed plans to invest 300bn yuan during 2007 on network extensions and capacity enhancement, as part of the 11th five-year plan which is due to see investment total 1 500bn yuan in 2006-10. Describing the package as 'the biggest in Chinese history' the National Development & Reform Commission's Transport Director Li Guyong said on November 22 that it would expand the national rail network by almost 20% to 90 000 route-km by 2010