Liquidity issues haunt investors
Print Edition
SHANGHAI stocks fell yesterday over liquidity issues brought by squeezed margin trading and pending initial public offerings.
The Shanghai Composite Index lost 0.96 percent to 3,174.13 points.
Shanxi Securities said brokerages faced tighter margin trading because the securities regulator conducted a second round of inspection on them. The move greatly limited transactions in the market. As the number of new stock trading accounts dropped, capital inflow into the market also ebbed.
Subscriptions for initial public offerings of 24 companies will open from Monday. Minsheng Securities estimated 2.6 trillion yuan (US$416 billion) will be locked, up 400 billion yuan from the IPOs in January.
Profit-taking hit financial stocks. AVIC Capital dropped 4.3 percent to 20.46 yuan, China Pacific Insurance lost 3.68 percent to 32.74 yuan, and the Bank of China fell 3.5 percent to 4.13 yuan.
The HSBC Purchasing Managers’ Index, an indicator slated toward private and export-oriented firms, landed at 49.7 last month, up a bit from 49.6 in December but still pointing to a fall in manufacturing activity.
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