Stocks News
- Chinese share prices tumble in wake of Shenhua's debut
Date: 27-Sep-2007 Sources: (People's Daily)
Chinese share prices continued their downward turn on Wednesday as the initial public offering (IPO) of China Shenhua Group, the nation's largest coal producer, froze at least 2.67 trillion yuan (351 billion U.S. dollars).
The Shanghai Composite Index dropped 1.61 percent, or 87.36 points, to close at 5,338.52 points. The Shenzhen Component Index fell 1.93 percent, or 354.13 points, to end at 17,992.32 points.
The combined turnover on the two bourses shrank to around 159 billion yuan (21.2 billion US dollars) from the 207.82 billion yuan on the previous trading day. It is the first time in September the figure has fallen below 200 billion yuan.
Property stocks plummeted on Wednesday following news that the central bank is likely to order commercial banks to raise mortgage deposits to at least 40 percent for homebuyers who intend to buy a second apartment.
Most of the banks slumped on Wednesday while the CCB only saw a slight rise of 0.35 percent. The Industrial and Commercial Bank of China dropped 1.85 percent to close at 6.37 yuan per share. Bank of China fell 1.37 percent to close at 5.76 yuan per share.
Large IPOs provide a greater supply of stocks and drag down prices, explained analysts.
China Shenhua Group froze around 2.67 trillion yuan on debut on Tuesday, breaking the record set by China Construction Bank (CCB) earlier this month.
Chinese investors are keen to apply for new stocks which are very likely to soar on the first day of trading. The CCB gained 32.25 percent on Tuesday when listed on the Shanghai Stock Exchange but investors seem not to be satisfied with the rise.
Later this week, China Securities Regulatory Commission (CSRC) will discuss the IPO applications of four companies including famous roast duck chain China Quanjude (Group) Co., Ltd., a software company and two real estate companies.
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