Hainan stocks soar after free trade port announcement
Nicholas Moore
["china"]
Stocks related to China’s southern province of Hainan soared in Monday trading, as investors flocked to the island after Friday’s pilot free trade port announcement.
Companies in the tourism, property and construction sectors all saw significant gains, following the news that Hainan will become China’s largest free trade zone. 
Chinese President Xi Jinping confirmed on Friday during celebrations of Hainan’s 30th anniversary of becoming a province that the island would become the country’s first free trade port “step by step and stage by stage.”
Described by Xinhua as a “window for the country’s reform and opening up,” Hainan has seen major development of its infrastructure in recent years, with the province designated an “international tourism island” in 2010.
Hainan has developed rapidly in recent decades, coming under the global spotlight last week after hosting the Boao Forum for Asia. /VCG Photo

Hainan has developed rapidly in recent decades, coming under the global spotlight last week after hosting the Boao Forum for Asia. /VCG Photo

Billions of yuan have been poured into developing international resorts, with companies like MGM Resorts International, Fosun International and China Evergrande Group all now likely to see their investments pay off.
Monday saw stocks in Lawton Development Co., a Hainan-based hotel and resort developer, reach the 10-percent daily limit, while other local travel and tourism companies also hit their daily trading limits.
Friday’s announcement said that development plans would focus on “sectors including seeds, medical care, education, sport, telecommunication and finance,” and Monday’s top-performing stocks on the Shanghai Composite Index reflected that, despite wider losses elsewhere on the stock market.
While the plans for Hainan are almost certainly a boost for tourism, retail and hotel companies, other announcements made on Friday such as a possible island-wide new energy vehicle (NEV) policy and a pledge of support for horse racing in the province will have their own knock-on effects.
Macau Special Administrative Region has long been Asia’s center of gaming with no real competition, but the introduction of horse racing in Hainan could slowly see its position come under threat. According to Bloomberg, an index of Macau-based gaming stocks fell by 2.2 percent towards the end of last week.
For Chinese NEV developers like BYD, BAIC and Geely, the news that China will control the number of vehicles in Hainan “in a scientific way” is being seen as a signal that authorities will slowly phase out petrol cars on the island, making it a “place with a green lifestyle,” according to Xinhua.
Meanwhile, a stronger Hainan will be good news for the province’s HNA Group, one of China’s biggest conglomerates, which has seen its finances come under increased strain since 2016.
A stronger Hainan Province will be good news for HNA Group, based in the provincial capital Haikou. /VCG Photo

A stronger Hainan Province will be good news for HNA Group, based in the provincial capital Haikou. /VCG Photo

Hong Kong-listed HNA Infrastructure saw its share price finish 11.26 percent higher at the close of Monday’s trading, while HNA Innovation – a branch of the HNA Group focused on the travel sector – reached its 10 percent daily trading limit on the Shanghai Composite Index.