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December 18, 2009

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Home » Business » Finance

Index closes lowest in 3 weeks

SHANGHAI'S key stock index yesterday tumbled to its lowest close in three weeks, on concern more share sales soon will divert funds from existing equities.

The Shanghai Composite Index dropped 2.34 percent, or 76.14 points, to close at 3,179.08, slipping for a third day in a row. Turnover yesterday totaled 123.8 billion yuan (US$18.1 billion).

China First Heavy Industries has regulatory approval to sell no more than 2 billion new shares in an initial public offering in Shanghai. The company is expected to raise 8.39 billion yuan, the China Securities Regulatory Commission said in a statement on its Website late Wednesday.

Companies have raised 170.9 billion yuan from IPOs on the Chinese mainland this year, a 65-percent jump over the figure for the whole of last year, as an improving economy and a stock market rebound lured investors.

Since December 7, China's securities regulator has approved the IPO applications of 20 companies.

"Investors were afraid the lack of liquidity will prevent the index from climbing, and caution should be taken in the next two weeks," GF Securities wrote in a note.

The Industrial and Commercial Bank of China, the nation's biggest lender, fell 1.15 percent to 5.17 yuan while Shanghai Pudong Development Bank lost 2.19 percent to end at 21.40 yuan.


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