Stock market surge makes four Chinese tycoons US dollar billionaires

Four new billionaires emerged on Tuesday in China after the biggest three-day gain in Chinese stocks since January pushed their shares by exchange-imposed limits to new highs.

Sun Jinguo, founder of Zhejiang Jingu, which makes wheels for commercial vehicles, and Liu Nianxin, chairman of Shenzhen Hongtao Decoration Co, both have a net worth of US$1.1 billion, according to the Bloomberg Billionaires Index.

Wu Qianghua, the chairman of Beijing eGOVA, a geographic information provider for the government, and Xie Zilong, chairman of Laobaixing Pharmacy Chain JSC, also have fortunes exceeding US$1 billion.

More than 50 billionaires have been created in China so far this year as markets surged. The benchmark Shanghai Composite Index posted a 7 per cent gain over three days, the biggest since January 22.

The Shenzhen index, which tracks shares on the smaller of the nation’s two stock exchanges, closed at a record on Tuesday after a three-day advance as the central bank cut interest rates for the third time in six months over the weekend.

“People are expecting more positive policies coming from mainland China,” said Ronald Wan, the chief executive of investment bank Partners Capital International in Hong Kong. “The government will do more to inject liquidity to the real economy and to try to stabilise the growth rate and make the economy perform better.”

The four companies controlled by the billionaires jumped by the 10 per cent limit at the close in Shanghai and Shenzhen on Tuesday.

Representatives of the companies could not be reached for comment after regular office hours.

The rally is poised to produce more billionaires as companies prepare to sell shares to the public.

Ni Zugen, who built a home-appliance manufacturer in China, became a billionaire on Wednesday as KingClean Electric started trading on the Shanghai exchange.

The stock climbed by the 44 per cent limit for trading debuts to 27.48 yuan at the midday break in Shanghai.

Ni’s Suzhou-based company sold 41 million shares in an initial public offering, according to its prospectus.

The 58- year-old chairman has just over 330 million shares held with his wife and son, giving him an 82 per cent stake after the share sale and a US$1.5 billion fortune, according to the Bloomberg index.

“People may see more and more IPOs,” Wan said, predicting the pace of IPO approvals to pick up, to meet the surging demand for the China stocks.

Wang Pingping, board secretary at KingClean, could not be reached for a comment.

The company makes appliances from vacuum cleaners to washing machines.

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