Stock market slumps 2.97% following slew of IPOs
By Zhang Ran (China Daily)
Updated: 2006-08-01 08:45
The increasing number of initial public offerings (IPOs) since the government
lifted a year-long ban on capital-raising led to a slump of 2.97 per cent on the
stock market yesterday, casting a shadow on investor confidence in the following
weeks.
The benchmark Shanghai composite index closed at 1,612.73 points on the last
day of July. Turnover in Shanghai A shares was a moderate 19.4 billion yuan
(US$2.425 billion).
Yesterday, A shares continued their downward trend since Friday, when most of
the quality stocks started to dive, sparking concern that too many IPOs had kept
trading sluggish in July. The trend is expected to further hurt sentiment in
August.
"Today's fall is mostly related to the increasingly massive new IPOs such as
Poly Real Estate and Daqin Railway. The China Securities Regulatory Commission
is accelerating the pace of IPOs, faster than the market expected," Cheng
Weiqing, an analyst with CITIC Securities, said.
Just after Poly Real Estate listed on the Shanghai stock market on Monday,
Daqin Railway Co Ltd, which launched the second-largest domestic IPO this year
in July, announced that it would list on the Shanghai bourse today.
Shares in the new listed Poly Real Estate jumped to 19.30 yuan (US$2.41), up
38.35 per cent from its issue price of 13.95 yuan (US$1.74) on its first day of
trading.
The new listing drew large capital from other real estate developers who
witnessed a general loss yesterday. Leading real estate developer China Vanke Co
Ltd was down by 4.48 per cent to close at 5.54 yuan (69.25 US cents). Financial
Street Holding Co Ltd slumped by 7.05 per cent to close at 8.18 yuan (US$1.02).
(For more biz stories, please visit Industry Updates)
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