China’s Stocks Rise, Set for Biggest Weekly Gain in Five Weeks

March 19 (Bloomberg) -- China’s stocks rose, poised for the biggest weekly gain in five weeks, as raw-material producers rallied after Aluminum Corp. of China Ltd.’s parent agreed to buy a stake in an African iron ore mine and copper prices gained.

Aluminum Corp. of China, the nation’s biggest maker of the material and also known as Chalco, surged the most since October. Shandong Nanshan Aluminum Co. advanced 4 percent. Jiangxi Copper Co. climbed 2.8 percent. Poly Real Estate Group Co. and COFCO Property (Group) Co. led gains by developers after the government ordered some rivals to exit the real estate business.

The Shanghai Composite Index rose 14.28, or 0.5 percent, to 3,060.37 as of 2:01 p.m. local time, erasing an earlier loss. The gauge has advanced 1.5 percent this week as a U.S. pledge to keep interest rates low boosted commodity prices and investors speculated recent equity declines were excessive. The CSI 300 Index advanced 0.4 percent to 3,279.07 today.

The Shanghai gauge has lost 6.6 percent this year, the fifth-worst performer among 93 global benchmark indexes tracked by Bloomberg, as the government twice increased lenders’ reserve requirements and re-imposed a tax on home sales

Chalco jumped the 10 percent daily limit to 13.65 yuan, the most since Oct. 9. Parent Aluminum Corp. of China agreed to pay $1.35 billion for a stake in Rio Tinto Group’s Simandou iron ore project in Guinea, London-based Rio said in a statement.

Chinalco, as the state-owned company is known, signed a non-binding accord to acquire a 45 percent share of the project by funding development over the next two to three years, Rio said.

Global Acquisitions

Shandong Nanshan Aluminum surged 5.5 percent to 12.25 yuan, set for the biggest gain since Dec. 24. Yunnan Aluminium Co., China’s fifth-largest producer of the light metal, advanced 6.9 percent to 12.92 yuan.

Companies in China, the biggest metals buyer, spent more than $30 billion buying up mines and oil deposits globally last year.

Jiangxi Copper rose 2.8 percent to 35.90 yuan. The June copper contract on the Shanghai Futures Exchange climbed as much as 0.9 percent to 60,050 yuan ($8,797) a ton and last traded at 59,900 yuan.

The Shanghai gauge may trade in a range between 2,700 and 3,200 in the second quarter, Shenyin & Wanguo Securities Co. said in a report. Investors should buy automakers and home appliance makers because of rising demand amid government support measures.

Developers Jump

The Shanghai Composite surged 80 percent to 3,277.14 last year as the economy rebounded driven by a record 9.59 trillion yuan of new loans and 4 trillion yuan, two-year stimulus spending on railways, airports and homes. The economy grew 10.7 percent last quarter, the fastest pace since 2007.

Poly Real Estate, the second-largest developer, rose 1.3 percent to 20.95 yuan. COFCO jumped 6.2 percent to 10.28 yuan in Shenzhen trading, the most in two months. A gauge of property stocks advanced for a fifth day, the longest stretch of gains in six months.

A total of 78 companies supervised by the State-Owned Assets Supervision and Administration Commission have already been told to withdraw from property industry after their current projects are completed because real estate isn’t their core business, Du Yuanquan, spokesman for the agency, said in a statement on its Web site yesterday.

“The change may speed up restructuring of the property industry, involving asset sales,” Zhao Duo, an analyst at Sealand Securities Co. in Shenzhen, said by telephone. “The cut in the number of state companies in real estate market will also help existing builders.”

--Zhang Shidong. Editors: Richard Frost, Allen Wan