Chinese shares make gains

Chinese shares closed at their highest level in nearly two years on Monday as investors bought banking stocks after regulators said they would let firms resume raising capital on domestic bourses, ending a year-long ban.
The benchmark Shanghai composite index finished 3.95 percent higher at 1,497.104 points, its highest closing level since June 7, 2004, when it ended at 1,517.145 points.
The percentage gain, which came on the first day of trading after a week-long holiday, was the biggest since June 8, 2005.
"Sentiment is bullish after a strong market rally this year," said Zheng Weigang, senior analyst at Shanghai Securities. "The index could rise further in the medium term, with lots of fresh money flowing into the markets."
The benchmark index has jumped nearly 30 percent since the beginning of this year, buoyed by market-friendly steps by the government, including encouraging greater participation by mutual funds.
Analysts said they expected the index to rise through resistance at 1,500 points in coming days.
Minsheng Banking Corp, the country's first private bank, was Monday's most active stock, closing up 2.35 percent at 4.35 yuan.
China Merchants Bank Co Ltd, the top Shanghai-listed lender, was the second-most active counter, jumping 4.73 percent to 7.53 yuan.
China suspended fund-raising, including rights share issues and initial public offerings, on domestic exchanges last May to pave the way for reforms to convert $250 billion in non-traded shares in listed companies into regular traded stock.
The China Securities Regulatory Commission issued on Sunday new rules which allow companies to resume capital-raising from Monday. It earlier pledged to raise the threshold for IPOs to encourage higher-quality firms to go public.
"Investors see the move as a major positive factor as they expect some good companies to float shares soon," said analyst Zhou Lin at Huatai Securities.
Analysts said Air China Co Ltd, the country's most valuable listed airline, was likely to be among the first to take advantage of the new rules.
Investors have complained that Chinese investors were deprived of the right to enjoy some of the fruits of China's booming economy because quality firms have flocked to more transparent and liquid markets abroad, especially Hong Kong.