Stocks News
- B shares jump on merger speculation
Date: 17-Sep-2007 Sources: (Shenzhen Daily)
GAINS in B shares on hopes they will be merged with A shares and rises in airlines on speculation of consolidation in the aviation sector pushed shares higher Friday.
The benchmark Shanghai Composite Index, which tracks both A and B shares, ended up 0.7 percent at 5,312.18. The Shenzhen Composite Index rose 1.6 percent to 1,482.86.
The market's rise Friday was despite speculation the central bank would hike interest rates again as early as Friday night, following another month of strong economic data with inflation hitting a decade high in August. The central bank indeed announced Friday night its fifth interest rate hike this year.
Traders said they expect the bull run to continue this week as liquidity remains flush.
The B-share indexes jumped after the Shanghai Securities News cited China Securities Regulatory Commission research head Qi Bin as saying the regulator has been 'carefully examining?the issue of merging the A and B-share markets.
'We have been studying the B-share issue. Some people think we should continue to develop the B-share market, while others say we should merge the B-share market with the A-share market,'Qi was cited as saying.
The Shanghai B-Share index rose 5.7 percent to 351.42, while its Shenzhen counterpart rose 4 percent to 768.49.
'From what I hear, a lot of local private-equity groups are snapping up B shares on expectations A and B shares will merge soon,'said Simon Wang, a strategist at Xiangcai Securities.
B shares typically trade at a discount to their A-share counterparts.
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