CHINA / National |
China shares fall 2.1 pct on policy, IPO worries(AP)Updated: 2007-07-04 19:14 SHANGHAI _ Chinese stocks fell Wednesday amid renewed worries regulators will move to tighten credit and expectations of a massive influx of shares from new listings. The yuan slipped back against the US dollar. The benchmark Shanghai Composite Index shed 2.1 percent to 3,816.17. The Shenzhen Composite Index also declined 2.1 percent, to 1,078.95. Heavyweight banks fell after the central bank said Tuesday it would "appropriately tighten policy," signaling its intention to curb overly rapid investment and loan growth. ICBC, China's largest lender by assets, fell 1.2 percent to 5.14 yuan; Bank of China dropped 1.6 percent to 5.02 yuan and China Citic Bank was down 2.4 percent at 9.09 yuan. "More and more investors have been heading for the sidelines after a series of cooling measures in past months," said Yang Weicong, a strategist at United Securities. "It's unclear when the correction will come to an end because of a waning interest in stock investments," he said. The number of new securities accounts opened recently suggests the fever for shares is waning. Official data showed that 99,957 new local-currency share accounts were opened Monday, down from 156,151 a week earlier and sharply lower than the 367,466 A-share accounts opened on May 29, when the Shanghai index surged to a record high of 4,335.96. After months of strong liquidity, a surge in new share listings is beginning to catch up with demand. Three state-owned giants: China Construction Bank, PetroChina and coal producer Shenhua Energy, have announced plans for domestic IPOs. Bank of Nanjing, Bank of Ningbo, high-tech firm Guangdong Ronsen Super Micro-wire and Sichuan Gaojin Food, are among other companies planning to offer new shares on local bourses. "The market is about to face liquidity pressure next week when the companies accept subscriptions to their new shares," said Zhang Yuheng, an analyst at CSC Holdings International. In currency dealings, the yuan retreated against the dollar after hitting fresh highs on Tuesday. The dollar was at 7.5965 at 0730 GMT on the over-the-counter market, up from Tuesday's close of 7.5944. |
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