China's Small-Cap Shares Climb After Li Keqiang's NPC Address

(Bloomberg) -- Chinese small-cap stocks were the biggest beneficiaries from the ongoing annual legislative meetings in Beijing.

The ChiNext gauge climbed 1.8 percent at the close, led by automation companies including CSG Smart Science & Technology Co., after Premier Li Keqiang said the government will "actively develop" the measure. The CSI 300 added 0.5 percent as Midea Group Co. and Gree Electric Appliances Inc. rose to lead makers of consumer discretionary goods higher.

Investors are gauging the outlook for the nation's industries amid the National People's Congress gathering. Systemic risk is under control and economic fundamentals remain sound enough for the government to set a 2017 growth target of "around 6.5 percent, or higher if possible," Li said in his work report to the annual legislative gathering in Beijing.

“Premier Li's work report reflects that the government wants to accelerate the development of the technology sector and develop it into a major economic growth driver," said Qian Qimin, a Shanghai-based analyst at Shenwan Hongyuan Group Co. "Also, the ChiNext fell more than mainboard stocks last year and recovered less year-to-date, so there has been some bargain hunting."

The Shenzhen Composite Index climbed 1.2 percent to its highest level since Dec. 9, and the Shanghai Composite Index added 0.5 percent.

The Hang Seng China Enterprises Index added 0.3 percent after its biggest weekly loss of 2017, while the Hang Seng Index rose 0.2 percent to 23,596.28.

While Li struck an upbeat note on China's slowing growth, he also warned of profound changes in the international political and economic landscape with rising protectionism and deglobalization, and said policy makers must be fully alert to building domestic risks from shadow banking to bond defaults and internet finance.

• CSG Smart Science & Technology and Siasun Robot & Automation Co. climbed 10%. Li said the country will accelerate the artificial intelligence industry's R&D and commercialization in his work report
• In Shenzhen, Midea advanced 3.7% and Gree added 3.1%. Growth in the home appliance retail market is likely to rise to about 8% in 2017 from 3% last year, Credit Suisse Group AG analysts Raymond Ching and Carey Shi wrote in a note
• AVIC Helicopter Co. surged 4.1% in Shanghai, the most since Jan. 17. The aircraft manufacturer is considering selling a stake in its civilian business to strategic investors, according to a person with direct knowledge of the matter
• ASM Pacific Technology Ltd. climbed 5.1% in Hong Kong after Huatai Securities Co. raised its price target to HK$116 from HK$99
• China's securities regulator said on social media on Friday that it gave permission to 10 more companies to list. The firms -- five in Shanghai and five in Shenzhen -- are expected to raise as much as 7 billion yuan ($1.02 billion), it said

To contact the reporter on this story: Jeanny Yu in Hong Kong at jyu107@bloomberg.net.

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Philip Glamann, Robin Ganguly