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October 16, 2009

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Home » Business » Finance

Bullish brokers send index higher

SHANGHAI'S key stock index rose for a third day yesterday, led by brokerages which are bullish over their profit expectations for the third quarter of the year.

The Shanghai Composite Index added 0.31 percent to close at 2,979.79, after hitting a high of 3,014.26. Turnover shrank to 110.5 billion yuan (US$16.25 billion) from 141.6 billion yuan on Wednesday.

State-backed China International Travel Service Corp surged 45 percent on its debut in Shanghai. It raised 2.6 billion yuan in an initial public offering selling shares at 11.78 yuan apiece. The firm closed at 17.08 yuan.

"The debut performance of the company was within market expectations," said Kang Hongtao, a Guoyuan Securities Co analyst. "But it failed to give a boost to the stock market, which indicated investors were quite cautious about the index's trend."

Brokerages were strong on hopes of robust earnings. Guoyuan Securities Co jumped 4.8 percent to 20.26 yuan after saying third-quarter net income may soar as much as 800 percent. Also hopeful of strong earnings, Northeast Securities Co gained 2 percent to 39.2 yuan and CITIC Securities Co, the country's biggest listed brokerage, added 1.8 percent to 27.13 yuan.

"Another batch of start-up companies to be listed on the Nasdaq-style growth enterprise market started to take subscriptions, which siphoned funds from the main board and pulled the key index down from an intra-day high," said He Yong, an analyst at S&E Securities Brokerage.

He said the index may move between 2,900 and 3,050 in the near term.


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