Markets face a difficult month
By Lydia Chen |
August 2, 2011, Tuesday
|
Print Edition
Print Edition
THE Chinese mainland's stock markets are facing a difficult August, pressured by a sharply increased slew of locked shares due to be tradable this month.
A total of nearly 27.83 billion locked shares are due to come on to the market, compared with 11.88 billion shares in July, while the total value of these shares is expected to be 52 percent higher than last month at almost 223.5 billion yuan (US$34.70 billion).
Almost 5.57 billion shares will be unlocked this week, nearly 40 percent more than last week. They are expected to total nearly 52.7 billion yuan in value based on closing prices last Friday, compared with 35.2 billion yuan last week.
But the bulk of unlocked shares will be released during the second half of the month - a total of 21.85 billion shares from 40 companies expected to be tradable from August 16 to 31 - 68 percent of this month's total.
Meanwhile, a number of new listings may also suppress markets. Nine initial public offerings will debut this week, the highest in five months.
Mainland markets have been volatile for more than two weeks amid investor concern over the huge loans Chinese banks have made to local government financing vehicles.
The Shanghai Composite Index, which tracks the bigger of the mainland's two stock bourses, shed 2.18 percent during July.
Leading Chinese investment bank China International Capital Corp suggested in a note yesterday that investors would be better to sell and keep their stock holdings low this month as "negative" market factors are increasing.
The A-share market may follow overseas markets with a rally after US lawmakers reached an agreement to avert a national debt default yesterday.
A total of nearly 27.83 billion locked shares are due to come on to the market, compared with 11.88 billion shares in July, while the total value of these shares is expected to be 52 percent higher than last month at almost 223.5 billion yuan (US$34.70 billion).
Almost 5.57 billion shares will be unlocked this week, nearly 40 percent more than last week. They are expected to total nearly 52.7 billion yuan in value based on closing prices last Friday, compared with 35.2 billion yuan last week.
But the bulk of unlocked shares will be released during the second half of the month - a total of 21.85 billion shares from 40 companies expected to be tradable from August 16 to 31 - 68 percent of this month's total.
Meanwhile, a number of new listings may also suppress markets. Nine initial public offerings will debut this week, the highest in five months.
Mainland markets have been volatile for more than two weeks amid investor concern over the huge loans Chinese banks have made to local government financing vehicles.
The Shanghai Composite Index, which tracks the bigger of the mainland's two stock bourses, shed 2.18 percent during July.
Leading Chinese investment bank China International Capital Corp suggested in a note yesterday that investors would be better to sell and keep their stock holdings low this month as "negative" market factors are increasing.
The A-share market may follow overseas markets with a rally after US lawmakers reached an agreement to avert a national debt default yesterday.
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