Stocks News
- Stocks edge lower as large-caps drop
Date: 20-Nov-2007 Sources: (People's Daily)
SHANGHAI: The stock market fell slightly yesterday, dragged down by PetroChina and some other large-caps as investors' worries about further tightening measures intensified.
The benchmark Shanghai Composite Index dropped 0.87 percent to close at 5269.82. Gainers outnumbered losers by 732 to 107. The Shenzhen Component Index dropped 0.4 percent to close at 16660.67.
The turnover on two bourses amounted to 94.7 billion yuan.
PetroChina, which was included in the Shanghai Composite Index yesterday, fell 1.93 percent to close at 38.07 yuan. The market value of the company's A share accounted for 23.53 percent of the market.
'The price premium of PetroChina's A share on its H share is too large, which is unsustainable,' said Zhu Haibin, an analyst at Essence Securities.
The price of PetroChina's A share is 162 percent higher than its H shares, which dropped 0.548 percent to 14.52 yuan yesterday. The PE (price-earnings) ratio of PetroChina's A share was 51, much higher than that of US giant Exxon Mobil's 12.
But the inclusion of PetroChina in the index reduced the dominant position of financial stocks in the weighting. Market value of oil and petroleum stocks account for 30 percent of the total while that of financial stocks has decreased from 39 percent to around 30 percent.
Many large-caps plunged yesterday, led by banks and real estate companies.
'The government's tightening of bank loans and the expectation of further interest rate hikes are expected to have a negative impact on banks' performance,' said Wu Feng, an analyst at TX Investment Consulting Co Ltd.
Industrial and Commercial Bank of China fell 1.46 percent to close at 8.12 yuan. Bank of Communications sank 2.05 percent to close at 14.81 yuan and China Merchants Bank slid 3.21 percent to close at 39.17 yuan.
One of the largest real estate developers, Vanke A, plummeted 3.99 percent, while COFCO Property (Group) Co Ltd declined 3.53 percent to close at 26 yuan.
'The profit margin of real estate developers is expected to be squeezed as the sales turnover of houses shrank sharply in recent months in major cities following the government's cooling measures,' said Zhu.
Sponsor Results:
