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December 9, 2009

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Index falls from high on IPO pressure

SHANGHAI shares dropped from a two-week high yesterday as financial sector and metal producers fell amid profit taking and increasing pressure of fundraising from initial public offerings.

The Shanghai Composite Index lost 1.06 percent to close at 3,296.66. Turnover lowered to 162.7 billion yuan (US$23.8 billion) from 171.8 billion yuan on Monday. The index had gained 7.64 percent from December 1 to Monday.

A total of nine companies start subscriptions this week.

China Shipbuilding Industry, the nation's largest maker of vessel equipment, started subscription yesterday.

It is expected to raise as much as 14.7 billion yuan in the Shanghai market to expand production facilities, nearly double its original plan.

"Fundraising pressure might curb the market from climbing further and the index will stay in adjustment with slim turnover," Shenyin & Wanguo Securities wrote.

The Industrial and Commercial Bank of China, the nation's biggest lender, eased 1.49 percent to 5.30 yuan. China Life Insurance Co, the country's top life insurer, slipped 1.39 percent to 32.70 yuan.

Metal producers also retreated from earlier gains as the gold price dropped. Zijin Mining Group Co, the nation's biggest producer of gold, dropped 1.03 percent to 10.52 yuan. Jiangxi Copper Co shed 1.09 percent to 42.62 yuan.

Consumer-related chips were among the gainers after the country's decision makers said at the Central Economic Work Conference that the government would boost domestic consumer spending next year.

Shanghai Join Buy Co, a local department store operator, jumped 4.10 percent to end at 8.38 yuan.


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