Reports on BOC plan drag index lower
By Joyce Pan |
January 7, 2010, Thursday
|
Print Edition
Print Edition
SHANGHAI'S key stock index reversed earlier gains and ended lower yesterday on media reports that the Bank of China plans to raise funds from the stock market.
The Shanghai Composite Index shed 0.85 percent, or 27.96 points, to close at 3,254.22. Turnover shrank to 158 billion yuan (US$23.2 billion) from 161.9 billion yuan.
Media reports said yesterday BOC is planning to seek funds from both the Shanghai and Hong Kong bourses in March to increase its capital-adequacy ratio. Analysts estimated the bank may seek more than 100 billion yuan.
"The reports weighed down the market and possibly constrained the key index's upward momentum as the financing plan posed concerns over rising pressure on liquidity in the market," Shenhua Securities Co wrote.
Meanwhile, concerns also grew over a tightened monetary policy after Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, said China faced risks from large inflows of "hot money" on a weaker United States dollar and China's relatively easy monetary policy.
BOC fell 1.2 percent to 4.29 yuan, China Merchants Bank slid 2.1 percent to 17.36 yuan and Shanghai Pudong Development Bank tumbled 2 percent to 20.93 yuan.
Commodity producers gained on rising prices. Jiangxi Copper Co rose 1.2 percent to 42.13 yuan and Aluminum Corp of China climbed 0.7 percent to 15.01 yuan.
The Shanghai Composite Index shed 0.85 percent, or 27.96 points, to close at 3,254.22. Turnover shrank to 158 billion yuan (US$23.2 billion) from 161.9 billion yuan.
Media reports said yesterday BOC is planning to seek funds from both the Shanghai and Hong Kong bourses in March to increase its capital-adequacy ratio. Analysts estimated the bank may seek more than 100 billion yuan.
"The reports weighed down the market and possibly constrained the key index's upward momentum as the financing plan posed concerns over rising pressure on liquidity in the market," Shenhua Securities Co wrote.
Meanwhile, concerns also grew over a tightened monetary policy after Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, said China faced risks from large inflows of "hot money" on a weaker United States dollar and China's relatively easy monetary policy.
BOC fell 1.2 percent to 4.29 yuan, China Merchants Bank slid 2.1 percent to 17.36 yuan and Shanghai Pudong Development Bank tumbled 2 percent to 20.93 yuan.
Commodity producers gained on rising prices. Jiangxi Copper Co rose 1.2 percent to 42.13 yuan and Aluminum Corp of China climbed 0.7 percent to 15.01 yuan.
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