Latest FTZ reform buoys share investors

Shanghai stocks edged up yesterday as investors were buoyed by a latest financial reform that is likely to boost businesses in the city's free trade zone.

The Shanghai Composite Index gained 0.96 percent to close at 3,203.83 points Friday. The index rose for five straight days and finished 4.6 percent higher for the week.

The Shanghai headquarters of the People's Bank of China on Thursday said that the central bank would allow companies and financial institutions in the free trade zone to borrow from overseas in both Chinese and foreign currencies with greater flexibility and without first getting government approval.

Orient Securities said the move will broaden the overseas financing channels for banks and trim relevant financing costs. The brokerage added that overseas private investment, making entry to the domestic financial markets easier and non-bank financial intermediaries may possibly be covered in future reforms.

Shanghai AJ Corporation surged by the daily 10 percent limit to 16.45 yuan (US$2.64), and Sinotex Investment & Development rose 4.97 percent to 22.59 yuan.