Hong Kong-listed electric power stocks also saw a major surge on the first trading day after Christmas, with $CHINA POWER (02380.HK)$ Surging over 17%, $CHINA RES POWER (00836.HK)$ soaring over 16%, $HUADIAN POWER (01071.HK)$up more than 15%, Huaneng Power International up over 14%, and Datang Power up over 11%.
The overall strength of the electric power stocks is partly due to the continuous advancement of electricity market reforms.
Recently, the National Development and Reform Commission (NDRC) and the National Energy Administration issued a notice regarding the signing and fulfillment of medium- and long-term electricity contracts for 2023. The notice requests that regions strengthen system design related to market models, trading categories, and trading methods, improve multi-cycle coordinated trading systems for annual, monthly, and intra-month periods, innovate trading mechanisms, shorten trading cycles, and increase trading frequency, actively exploring the extension of medium- and long-term trading towards daily operations,and accelerate the continuous operation of medium- and long-term trading.In 2023, all regions should normalize weekly or every-ten-days trading schedules and allow the simultaneous execution of contract transfers and repurchase transactions during energy trading, improving the ease of trading for market participants.
The notice emphasized thatmarket-oriented electricity users’ signed volume of medium- and long-term contracts for 2023 should exceed 80% of their electricity consumption from the previous year,and ensure through subsequent quarterly, monthly, and intra-month contract signings that the total annual signed volume of medium- and long-term contracts exceeds 90% of the previous year's electricity consumption. Provinces with higher proportions of hydropower and renewable energy may have appropriately relaxed signing ratios.
It is worth noting that...