CPC congress report drives up "green" shares

Companies in forestry, water conservancy, environmental protection and energy conservation sectors outperformed broader markets Tuesday after the Communist Party of China (CPC) gave ecological progress a more prominent position by incorporating it into the country's overall development plan. Inner Mongolia Hotision and Monsod Drought-Resistance Greening Co.(Monsod Drought-Resistance), a landscape engineering company, jumped 8.76 percent on Tuesday following rises for two straight trading days. Shanghai Yatong Co., a timber dealer, surged 7.84 percent on Tuesday, while Fujian Jinsen Forestry Co. climbed by the daily limit of 10 percent. Meanwhile, the benchmark Shanghai Composite Index fell 1.51 percent to end at 2,047.89. Analysts attributed the performance to China's fresh determination to boost ecological progress announced at the ongoing 18th CPC National Congress. "We must give high priority to making ecological progress, work hard to build a beautiful country and achieve lasting and sustainable development for the Chinese nation," Hu Jintao said in a report to the congress. Analysts believe the capital market will likely focus on shares fueled by the announcement, as these companies may become major investment options for the year. The market will likely favor "green" companies for some time, betting on more supportive measures for the sector and thus creating room for further growth, said Fu Yongchong, an investment consultant at Datong Securities. The ecological progress blueprint will affect market demand, Monsod Drought-Resistance said in a Tuesday statement to the Shenzhen stock exchange. The company said its earnings will be affected by the development of ecological construction projects and the company's market shares, although it is unknown what effect they will have.