Health-care reform boosts shares

Shanghai stocks gained yesterday for the first time in three days as health-care counters surged after the government said it will deepen reform of public medical services, while investors ignored an eighth straight month of decline in foreign direct investment.

The Shanghai Composite Index added 0.6 percent to close at 2,397.18 points.

China will further reform the marketing, sale, distribution and pricing of drugs and improve the management system of primary-level medical institutions to ensure basic health-care services to all residents by 2020, the State Council, China's Cabinet, said in a guideline.

"Reforms of the medical system will help boost demand for health-care services," said Zhang Jiuhui, analyst at Great Wall Securities.

"The favorable fundamentals of the medical industry also appeal to investors."

Kangmei Pharmaceutical Co rose 5.7 percent to 17.76 yuan (US$2.85). Shanghai Pharmaceuticals Holding Co soared 6.9 percent to 13.94 yuan. Guangzhou Pharmaceutical Co added 4.7 percent to 28.75 yuan.

China attracted US$9.27 billion of FDI in January, down 7.3 percent from a year earlier, the Ministry of Commerce said yesterday. The drop, accelerating from December's fall of 4.5 percent, shrank for the eighth consecutive month.

But Dariusz Kowalczyk, senior economist at Credit Agricole CIB, expects FDI to rebound this year and rise 4.5 percent for next year as global business confidence improves.

Beijing Capital Co, a wastewater disposal firm, jumped by the daily limit of 10 percent to 5.07 yuan and Tianjin Capital Environmental Protection Group Co also surged 10 percent to 6.18 yuan after China said it will invest 350 billion yuan to curb air pollution.