Stock exchanges boosted by news of reform plans

Stocks in the Chinese mainland soared in their biggest daily gain in two months on Monday as investors were cheered by the release Friday of a detailed reform road map, which included a new effort to ease the IPO process.

The benchmark Shanghai Composite Index jumped 61.39 points or 2.87 percent to close at 2,197.22 points on Monday. The Shenzhen Component Index rose by 217.85 points or 2.62 percent to 8,523.75 points.

Combined turnover on the two bourses was 271.6 billion yuan ($44.58 billion), an increase from Friday's 232.4 billion yuan.

Shares in 213 companies rose by more than 5 percent on the two bourses on Monday, and 57 stocks shot up by the daily limit of 10 percent. The financial sector saw the biggest gains, backed by reform plans revealed Friday, following the Third Plenary Session of the 18th Communist Party of China Central Committee.

The financial reforms ranged from making the IPO process easier to the establishment of private banks, boosting shares in securities dealers and banks. China will change the current IPO approval system to a registration system and allow private capital to set up small and medium-sized banks.

The new IPO registration system will play a decisive role in allocating financial resources, according to a research note Monday from Shanghai-based fund consultancy HowBuy. "The stock market will be more market-oriented and it will help the long-term development of the stock exchanges," it said.

Leading securities dealer Citic Securities Co rose by the daily limit of 10 percent to 12.71 yuan on Monday, while China Merchants Bank Co rose by 9.56 percent to 11.34 yuan.

The reform plans also revealed that China will allow couples to have two children if one of the parents is an only child. This boosted stocks in maternity goods and children's products, with Beijing Sanyuan Foods Co and toymaker Guangdong Qunxing Toys Joint-Stock Co rising by the daily limit of 10 percent on Monday.

National security and defense-related stocks were also among the biggest gainers, following a communiqué published Tuesday after the conclusion of the plenum, which revealed that the country will set up a State Security Committee.

Information security firm Bluedon Information Security Tech Co and security products manufacturer Shenzhen Infinova Ltd both rose by the daily limit of 10 percent for a fourth consecutive day to 17.83 yuan and 15.96 yuan, respectively.

ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups listed in Shenzhen, rose by 22.10 points or 1.74 percent to 1,291.15 points at close of trading Monday.