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Bank rules report hits stocks
By Ding Yining and Feng Jianmin |
September 17, 2010, Friday
|
Print Edition
Print Edition
SHANGHAI'S key stock index dropped the most in three weeks on concerns that banks may be ordered to raise capital adequacy ratios and interest rates to combat inflation.
The benchmark Shanghai Composite Index slid 1.89 percent, or 50.04 points, to close at 2,602.47, the biggest loss since August 25. Turnover was 128.5 billion yuan (US$18.9 billion).
The National Business Daily reported that China's regulatory bodies are mulling new rules, including the possibility of raising banks' capital adequacy ratio from 11.5 percent to 15 percent by 2012, to increase their ability to avoid risks.
The measure may cause a total of 1 trillion yuan capital deficit for the five largest banks of China, according to the report.
"The market will remain flat as long as the government doesn't rule out possibilities to raise interest rate and lift banks' capital adequacy ratio," China Development Bank Securities wrote in a research note.
The Agricultural Bank of China shed 1.87 percent to 2.63 yuan, breaking its initial public offering price of 2.68 yuan for the first time. The Bank of China fell 2.12 percent to 3.23 yuan. The Industrial and Commercial Bank of China lost 1.49 percent to 3.97 yuan.
Property developers also dragged the index down. Poly Real Estate fell 1.88 percent to 10.94 yuan. Gemdale Corp dropped 1.44 percent to 6.15 yuan.
Commodity producers were weak after crude oil sank 1 percent to US$75.16 a barrel. PetroChina was down 0.4 percent to 10 yuan. Jiangxi Copper Co lost 2.61 percent to 31.35 yuan. Shandong Gold Mining Co slumped 4.02 percent to 42.97 yuan.
The benchmark Shanghai Composite Index slid 1.89 percent, or 50.04 points, to close at 2,602.47, the biggest loss since August 25. Turnover was 128.5 billion yuan (US$18.9 billion).
The National Business Daily reported that China's regulatory bodies are mulling new rules, including the possibility of raising banks' capital adequacy ratio from 11.5 percent to 15 percent by 2012, to increase their ability to avoid risks.
The measure may cause a total of 1 trillion yuan capital deficit for the five largest banks of China, according to the report.
"The market will remain flat as long as the government doesn't rule out possibilities to raise interest rate and lift banks' capital adequacy ratio," China Development Bank Securities wrote in a research note.
The Agricultural Bank of China shed 1.87 percent to 2.63 yuan, breaking its initial public offering price of 2.68 yuan for the first time. The Bank of China fell 2.12 percent to 3.23 yuan. The Industrial and Commercial Bank of China lost 1.49 percent to 3.97 yuan.
Property developers also dragged the index down. Poly Real Estate fell 1.88 percent to 10.94 yuan. Gemdale Corp dropped 1.44 percent to 6.15 yuan.
Commodity producers were weak after crude oil sank 1 percent to US$75.16 a barrel. PetroChina was down 0.4 percent to 10 yuan. Jiangxi Copper Co lost 2.61 percent to 31.35 yuan. Shandong Gold Mining Co slumped 4.02 percent to 42.97 yuan.
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