A-shares added almost a trillion yuan in market value on the first day of trading after Beijing announced plans to build a special economic zone in the heartland of sleepy Hebei province, with 78 stocks seen as concept plays for the new area hitting their 10% daily limit-up threshold.
Xiongan New Area is expected to grow over time to be three times the area of New York City under plans announced by the Communist Party’s top leaders last Saturday.
The country’s state-owned enterprises are throwing their weight behind the new initiative, with China Unicom, Sinopec and China Railway Construction eyeing juicy deals from the zone’s total makeover. Plans were announced in December to build a high-speed rail link to the zone.
Hot money is betting the rally is only just beginning after property prices in the area reportedly surged more than threefold overnight to as much as 25,000 yuan (US$3,600) per square meter, with speculators scrambling to snatch anything they could get their hands on.
Of course, the central government saw that coming and had already banned all real estate transactions in the zone, while tightening home purchase rules in neighboring vicinities to fend off speculators.