Shanghai index falls to near 4-month low
By Lydia Chen |
January 26, 2011, Wednesday
|
Print Edition
Print Edition
THE Shanghai stock market fell to its lowest in nearly four months, weighed down by commodity and property shares while small caps extended losses after several stocks dropped on their first day of trading.
The Shanghai Composite Index slipped 0.68 percent to 2,677.43, the lowest since September 30. Turnover declined to 75.58 billion yuan (US$11.49 billion) from 96.2 billion on Monday.
"The market now lacks money to pull it up," said Tong Bin, an analyst of Guotai Junan Securities Co. "Frequent new listings have soaked up funds at a time when liquidity is usually tight before the Spring Festival break."
Four of the five firms that made their trading debut yesterday on the Chinese mainland's two stock bourses fell below their IPO prices. The worst performer of these companies was Jiangsu Skyray Instrument Co, which dived 16.68 percent.
The shortage of funds has prompted the People's Bank of China to inject around 300 billion yuan into the interbank market this week via reverse bond repurchase agreements.
In addition, the central bank said it suspended sales of bills in its regular open-market operations for the second straight week
The poor performances among developers came after a report by Ningxia TV Station said Shanghai is waiting for the central government to approve its plan to impose a 4 percent property tax when a family purchases a home of more than 60 square meters on a per capita basis. The market had been expecting a tax rate of 0.6 to 0.8 percent.
Shenzhen City has also submitted a property tax plan, following Chongqing and Shanghai, the report said.
Gemdale Corp, China's fourth-largest listed developer, fell 0.8 percent to close at 7.21 yuan.
The Shanghai Composite Index slipped 0.68 percent to 2,677.43, the lowest since September 30. Turnover declined to 75.58 billion yuan (US$11.49 billion) from 96.2 billion on Monday.
"The market now lacks money to pull it up," said Tong Bin, an analyst of Guotai Junan Securities Co. "Frequent new listings have soaked up funds at a time when liquidity is usually tight before the Spring Festival break."
Four of the five firms that made their trading debut yesterday on the Chinese mainland's two stock bourses fell below their IPO prices. The worst performer of these companies was Jiangsu Skyray Instrument Co, which dived 16.68 percent.
The shortage of funds has prompted the People's Bank of China to inject around 300 billion yuan into the interbank market this week via reverse bond repurchase agreements.
In addition, the central bank said it suspended sales of bills in its regular open-market operations for the second straight week
The poor performances among developers came after a report by Ningxia TV Station said Shanghai is waiting for the central government to approve its plan to impose a 4 percent property tax when a family purchases a home of more than 60 square meters on a per capita basis. The market had been expecting a tax rate of 0.6 to 0.8 percent.
Shenzhen City has also submitted a property tax plan, following Chongqing and Shanghai, the report said.
Gemdale Corp, China's fourth-largest listed developer, fell 0.8 percent to close at 7.21 yuan.
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