SHANGHAI: Tibetan tourism and drug stocks rose the most in China's benchmark stock index after the National Business Daily reported the government will increase stimulus spending and seek industry mergers in the autonomous region.
Tibet Rhodiola Pharmaceutical Holding Co, a manufacturer of local medicines, gained by the daily limit of 10 percent to 16.67 yuan ($2.44) in Shanghai. Tibet Shengdi Co, which provides travel services and operates restaurants, jumped 10 percent for a second day, gaining 1.18 yuan to 12.96 yuan.
The rally in the stocks comes after a high-level meeting held in the region in January, and as the government boosts investment in the less-developed regions of the country.
Tibet will consolidate the pharmacy and tourism industries by 2010, the National Business Daily said on its website yesterday, citing Yu Heping, head of the autonomous region's State Assets Supervision and Administration Commission. There are also expectations the government will introduce economic stimulus plans for regions including Tibet and Xinjiang, the report said, citing a Huatai United Securities Co report.
"The report on consolidation in Tibet's tourism and pharmacy industries probably boosted share prices because it will help the companies," Lu Guoqi, an analyst at Qilu Securities Co said.
The meeting, which ended on Jan 20, stressed the need to improve Tibet's economy and social conditions, notably in rural areas. More than 300 officials attended, including President Hu Jintao.
The authorities are seeking to improve living standards in the region, aiming to bring per-capita economic production close to the national average by 2020, Xinhua reported on Jan 23.
"The government has shifted to its agenda of rebalancing growth between the eastern and western regions to create a new driver for the economy," said Zheng Tuo, president of Shanghai GoodHope Equity Investment Management. "Lots of favorable policies are expected to be given to western regions to support their economic development and promote the shift of manufacturing industries to the area."
The central government will increase its investment in Tibet this year by almost 500 million yuan to more than 2.3 billion yuan, according to a Jan 18 statement on the website of the Tibet autonomous region's government.
Bloomberg News
