Stocks drop 1.47% with low trading volume, 06/14
By Li Zengxin (chinadaily.com.cn)Updated: 2007-06-14 16:02
Total market value of all securities listed on the two exchanges was 18.18 trillion yuan by yesterday's closing, surpassing that on May 30 by 400 billion yuan, but still 840 billion yuan less than May 29, when the stamp tax hike was issued overnight to trigger a 6.5 percent plunge the next day.
The number of new A-share accounts opened on Tuesday dropped again to below 200,000, according to China Securities Depository and Clearing Co Ltd. There were 219,065 new investment accounts on June 12: 182,020 new A-share, 2,118 B-share and 34,927 fund accounts.
By June 12, there were 103.8 million investment accounts in the Chinese mainland, including 89.8 million A-share, 2.2 million B-share and 11.8 million fund accounts.
Three companies issued shares in the mainland market in May. For the first five months this year, 42 initial public offerings (IPOs) were completely on the two bourses, raising 107.6 billion yuan, accounting for 65 percent of the whole year of 2006.
In the first five months, 56 companies issued additional shares, raising 41.3 billion yuan, accounting for 39 percent of 2006. Of the companies, 52 used directed share placement method in the issuances, raising 40.3 billion yuan, accounting for 43 percent of last year. In May, seven firms issued additional shares.
The regulators were mulling a set of measures to attract more enterprises and capital into the stock market and keep them from flowing overseas. According to a source with the China Securities Regulatory Commission (CSRC), China prefers domestic companies to list on the A-share market, than go public overseas.
It is very hard, especially for private enterprises to list overseas now, said the source. CSRC has suspended approving local firms applying for overseas IPO since April. Only those with an asset scale of over US$1 billion may get the nod, he said, although such "internal guidance" were not enforced by legislation or regulation. Western Ming, for instance, gave up the plan to go public in Hong Kong and became listed in the mainland bourse under a suggestion by CSRC.
On the other hand, the country is stepping up efforts to combat insider trading and misconducts in information disclosure. As the latest move, prosecutors in Zhejiang Province approved the arrests of Luo Gaofeng, securities representative of Shanghai-listed Zhejiang Hangxiao Steel Structure Co, Wang Xiangdong and Chen Yuxing on Monday, after the company and senior mangers were fined for misconducts in information disclosure last month.
Twenty companies have applied to CSRC for issuance of corporate bonds, said another source with the securities watchdog. Analysts believe the first batch of companies approved will be among the high-quality listed stocks in the Shanghai-Shenzhen 300 Index.
CSRC released a draft rule governing corporate bond issuance for public opinions yesterday, which will allow listed companies in the two stock exchanges and domestic companies whose parents are listed overseas to issue corporate bonds in the mainland markets, if qualified for a set of requirements.
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