Stocks News
- Shanghai News
Date: 16-May-2007 Sources: (People's Daily)
All three major Chinese equity markets nosedived Tuesday, amid continued frothy turnover of 307 billion yuan (40 billion U.S. dollars) on the two bourses, up nearly 10 percent on the previous day.
Major bank stocks fell hardest but the Bank of Communications, which debuted on the A-share market Tuesday, was a stellar exception.
The 10th commercial bank to go public on the A-share market, the Bank of Communications Tuesday listed nearly 1.6 billion A-shares on the Shanghai Stock Exchange.
It closed up 71 percent at 13.54 yuan, close to double its IPO (initial public offering) price of 7.9 yuan.
But China Merchants Securities analyst Luo Yi pointed out that the newcomer's profitability was not the best among listed banks.
Price-earnings ratios for bank shares currently average 41.33 times, higher than the Bank of Communications IPO.
With the shares of most listed banks slumping on Tuesday, some analysts speculated that investors wanted to sell other shares in order to buy into the Bank of Commmunications.
The benchmark Shanghai Composite Index ended Tuesday trading at 3899.18 points, down 147.21 points, or 3.64 percent, from the previous close on a daily transaction volume of 207 billion yuan (26.9 billion U.S. dollars).
The key stock index, which covers both yuan-denominated A-shares and foreign-currency-denominated B-shares, moved between 3891.36 points and 4069.85 points.
The Component Index on the Shenzhen Stock Exchange plummeted 317.54 points, or 2.71 percent, to close at 11,414.54 points on turnover of 99 billion yuan (12.9 billion U.S. dollars).
The Shanghai stock exchange recorded 194 gainers and 600 losers with 98 shares unchanged, while the Shenzhen bourse saw 143 gainers and 416 losers with 105 shares unchanged.
Bank shares suffered a lot in the downward trend, analysts said.
CITIC Bank declined 5.79 percent to 10.9 yuan, Pudong Development Bank went down 7.48 percent to 27.1 yuan, Minsheng Banking Corp. was down 6.3 percent to 13.53 yuan, and China Merchants Bank down 6.14 percent to 20.8 yuan.
Meanwhile, heavyweights Industrial and Commercial Bank and Bank of China fell 4.17 percent and 4.57 percent respectively.
Analysts with Shiji Investment said that around the 4,000-point barrier the Shanghai Composite Index was likely to experience violent volatility. Those with Tiantong Securities were more optimistic, saying that the market would continue to be shored up by excess liquidity. They believe stockbuying mania will persist, leading to new highs.
It is reported that on May 8, the first trading day after the weeklong May holiday, the two bourses recorded the opening of 421,831 new stock trading accounts, including 368,400 accounts for the A-share market. This brought the total number of stock trading accounts on the two exchanges to 94.37 million.
On Tuesday, the Hushen 300 Index, which tracks 300 companies on the Shanghai and Shenzhen stock exchanges, closed at 3,604.64 points, down 129.78 points, or 3.48 percent, from the previous close.
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