Investors make a beeline for Xiongan New Area stocks

Companies related to Xiongan New Area saw their share prices surge on Friday, a day after an official release outlined the guidelines for the area.

Xiongan New Area concept stocks showed the most robust growth of 2.15 percent on Friday, while the bench mark Shanghai Composite Index gained 0.63 percent to close at 3,289.02 points. The Shenzhen Component Index rose 0.04 percent to 10,662.79.

Companies such as Hubei Huitian New Materials, Beijing Hanjian Heshan Pipeline and Beijing Egova saw their prices surge by the daily limit of 10 percent.

Xi Jinping, general secretary of the Communist Party of China Central Committee, chaired a meeting on Thursday, during which the Standing Committee of the Political Bureau of the CPC Central Committee listened to briefings about the planning compilation of the new area.

An official release after the meeting pointed out that a digital city should be planned and built simultaneously in Xiongan. A slew of national-level innovation programs will be built as planned by the country to make the new area innovation-driven, said the release.

Highly efficient transportation networks shall cover Xiongan. A multilevel, people-friendly network offering basic public services should also be built there, according to the release.

The release also stressed that a number of fundamental major projects should be initiated at appropriate times to ensure a good start to the construction of the new area.

"Xiongan New Area should become a national role model to advance high-quality development", it said.

Shenzhen-based Great Wall Securities said in a note that Xiongan concept stocks will gain high traction with investors in the next few months.

"The market has shown high expectations for the Xiongan concept stocks," the note said. "The market will pick up confidence as the framework plans start to be carried out as scheduled. Investors should watch closely the listed companies supported by substantial business growth and policy incentives."

Analysts from Guangzhou-based GF Securities said that the cement industry is expected to gain significantly from the construction of Xiongan New Area. Both the sales volume and price will show significant signs of growth, especially in Beijing, Tianjin and Hebei province.

Located about 100 kilometers southwest of Beijing, Xiongan geographically covers part of Hebei province's Xiongxian, Rongcheng and Anxin counties.

General Secretary Xi visited Hebei province on Feb 23, 2017 and chaired a meeting on the planning of Xiongan. In April, the central authorities announced a plan to establish Xiongan New Area.

According to the report of the 19th CPC National Congress delivered in October, the country aims to "develop forward-looking plans and adopt high standards for building Xiongan New Area".

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