Insurance News
- Shares end 9-day rise in record turnover
Date: 16-Apr-2007 Sources: (Shenzhen Daily)
THE mainland's main stock index ended a nine-day rising streak in record turnover Friday, causing some to think a long-awaited pull-back was starting after spectacular gains in recent weeks.
But with the market awash in new money and mutual funds continuing to attract huge amounts of fresh subscriptions, analysts said any fall was unlikely to be steep.
The Shanghai Composite Index ended down 0.36 percent at 3,518.267 points, after setting an all-time high of 3,563.856 earlier in the day. Losers outnumbered gainers by 523 to 336.
Turnover in Shanghai A shares hit a record 165.6 billion yuan (US$21.5 billion), up from 147.8 billion yuan Thursday and the previous record of 155.6 billion yuan Wednesday.
'Investors have been growing increasingly worried about the continued gains so this correction is quite natural, but I don't expect it to last long as it is still a bullish market,' said Li Wenhui, analyst at Huatai Securities.
The index is up 22 percent from the end of February and last week reached the 3,500 point level, which many investors had seen as a target.
The securities regulator said late Thursday that it would review today an application by Bank of Communications for its Shanghai listing, which could raise as much as US$3.5 billion if it is priced in line with the bank's Hong Kong-listed H shares.
Money is so ample that the market should be able to absorb this initial public offering (IPO) as well as CITIC Bank's IPO this week without trouble, analysts said.
But the large size of the offers could siphon some funds from other heavyweight bank stocks and the market has climbed so fast that any unexpected negative news, such as lukewarm demand for an IPO or a poor performance on listing, could hurt sentiment, some traders said.
'Investors want to cash in after recent gains, especially in the metals sector,' said Zhang Qi, analyst at Haitong Securities.
Copper plays, which had surged in the previous two days, fell Friday after Shanghai copper and zinc futures dropped around 3 percent following a failed attempt to drive London copper above US$8,000 a ton. Jiangxi Copper fell 2.71 percent to 24.37 yuan.
Many banks were weak with Industrial and Commercial Bank of China, the most heavily weighted stock, sinking 1.98 percent to 5.45 yuan.
Among other key blue chips, Baoshan Iron and Steel dropped 2.62 percent to 10.79 yuan as investors locked in profits after the week's surge on the back of a strong first-quarter earnings estimate.
But several top blue chips continued rising, suggesting many investors believed the market's uptrend would soon resume. Sinopec climbed 3.25 percent to 11.74 yuan, after hitting an all-time high of 11.99 yuan.
Sichuan Changjiang Packaging Holdings soared an eye-popping 849 percent to 68.16 yuan on resuming trade after being suspended since the end of last year. It projected that it would swing to a profit in the first quarter of 2007.
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