China's stocks plunge nearly 5%
(Xinhua)
Updated: 2006-07-13 17:19
China's stock markets closed Thursday's trading 5 percent down due to
investors securing their profits, pressure from imminent IPO listings and
concerns about possible interest rate hikes.
The Shanghai Stock
Exchange's Composite Index, which comprises yuan-denominated A shares and
foreign-currency B shares, closed at 1,655.8 points, 84.2 points lower, down by
4.84 percent.
Total turnover of the Shanghai market was 40.1 billion
yuan (5.01 billion U.S. dollars) with 1,224 share prices down, 63 up and five at
the same prices.
Market heavyweights Bank of China, Sinopec, China
Yangtze Power, Unicom and Baosteel fell by 2.7 percent to 3.49 percent. About
200 shares dropped by 10 percent, the maximum daily decrease.
Bank of
China, which was listed earlier this month on the Shanghai market, dropped by
0.1 yuan to 3.6 yuan at the closing session, the lowest since its debut on the
market.
Wan Wenyu, an analyst with Shiji Securities Co, said the
imminent listings of Daqin Railway Co. and Industrial and Commercial Bank of
China (ICBC), the country's biggest bank, were responsible for the market falls.
Market investors are selling shares to raise billions of yuan in cash
for the initial public offering (IPO) of the two companies, she said.
Investors arranged 500 billion yuan for about 6 billion A shares of the
Bank of China, the country's second biggest commercial bank, last month in the
offering. The bank raised about 20 billion yuan from the offering.
Daqin
Railway Co. said it plans to raise 15 billion yuan from the Shanghai market, and
ICBC, which has yet to publicize its IPO plan, is expected to raise much more
from the market, said Wan.
Investors are also concerned abut possible
interest rate hikes to curb excessive investment growth. A think-tank of the
National Development and Reform Commission has called for an interest rate hike,
according to Wednesday's edition of the China Securities Journal.
The
major index of the Shenzhen Stock Exchange, the Shenzhen Component Index, was
down by 201.75 points, or 4.64 percent lower, to close at 4,149.06 points, with
a total turnover of 25.7 billion yuan (3.2 billion U.S.
dollars).
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