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Shanghai Index falls as investors dump B shares

(Shanghai Daily)
Updated: 2007-03-05 17:21

ShanghaiComposite Index fell 1.6 percent today as investors sold off holdings in foreign-currency denominated "B-shares" after officials denied rumors those stocks might be merged with the mainstream Chinese-currency shares.

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The main Shanghai Composite Index closed at 2,783.31, The Associated Press reported.

The Shanghai market's B-share index plunged 6.9 percent to 161.44.

Investors began selling B-shares, which are traded separately from the main Chinese currency-denominated "A shares," after Zhu Congjiu, president of theShanghai Stock Exchange, told reporters there were no plans to merge the two markets.

Speculation that the markets might be merged had boosted B-share prices in recent weeks. Even after today's tumble, Shanghai's B-share index was still 24 percent above where it began the year. The A-share index was up 4.11 percent for the year, despite a nearly 9 percent plunge on February 27 that rattled global markets.