SAIC Motor Corp. and Daqin Railway Co. yesterday rose to the highest levels in at least three years in Shanghai as investors sought mainland shares with high dividend yields on the first day of the exchange link with Hong Kong.

    SAIC Motor, the nation’s biggest automaker, closed up 3.18 percent at 19.47 yuan (US$3.17), heading for the highest level since April 2011. Daqin Railway rallied 6.18 percent to the highest level since April 2010.

    SAIC Motor has a dividend yield of 6.1 percent, while Daqin Railway’s yield is 4.4 percent. Goldman Sachs Group Inc. and Standard Chartered Plc. recommended Daqin Railway shares as link plays, while SAIC Motor was preferred by UBS AG and Citigroup Inc.

    “Yields are obviously more attractive to the international community than retail-focused A-share investors focused on growth and news-flow driven stories,” said Robert Buckley, managing partner for Asia at Aviate Global LLP. “Daqin Railway is one of the stand-out names of interest today given its cheap valuation, strong dividend yield, strong cash generation and potential for a tariff hike in the first half of 2015.”

    The Shanghai Composite Index, which has an average yield of 2.7 percent for its 1,022 companies, was down 0.19 percent yesterday. The full daily quota for international investors buying Shanghai shares was filled, compared with 14 percent for mainland investors purchasing Hong Kong shares.

    Chinese consumer companies were in demand, with Kweichow Moutai Co., the biggest baijiu liquor maker, surging more than 6 percent in the morning before closing the day up 1.75 percent.

    “Kweichow Moutai has been under pressure because of the government anti-graft campaign but it’s one of China’s most successful luxury brands and largest of all the consumer names,” Buckley said. “No surprise to see offshore investors buying something like this that they haven’t had access to previously.” (SD-Agencies)