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Shanghai shares fall 1.83% over vague reform guidelines
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Shanghai stocks declined the most in seven weeks as the reform plan released yesterday after the ruling Party’s policy meeting failed to show investors detailed measures to bolster the world’s second-largest economy.
The benchmark Shanghai Composite Index lost 1.83 percent, the biggest daily fall since September 26, to 2,087.94 points. Turnover was 73.4 billion yuan (US$12 billion) by the trading close.
China unveiled the long-awaited reform agenda for the next decade after the Communist Party Central Committee concluded its plenary meeting yesterday, stressing the decisive role of the market in allocating resources and pledging further land reform and more property rights for farmers.
“The communique from the meeting delivered no major surprises and is largely in line with our expectations,” said Zhu Haibin, chief China economist with JP Morgan.
“As expected, the reform principals are largely high-level ones and there is a lack of concrete measures with regard to many aspects of reforms mentioned in the communique,” Zhu said.
UBS Securities said in its latest A-share strategy report that the market needs to wait a while longer as reform details need to be confirmed and some reforms may encounter difficulties in implementation.
Oil, electricity and gas shares dragged the market down as the communique didn’t mention reforms in these sectors.
China Petroleum & Chemical Corporation dropped 1.7 percent to 4.68 yuan. PetroChina Co Ltd skid 1.5 percent to 7.65 yuan. SDIC Power Holdings Co Ltd slumped 5.1 percent to 4.08 yuan. GD Power Development Co lost 3.6 percent to 2.40 yuan.
Lenders retreated among financial shares after data from the China Banking Regulatory Commission showed the non-performing loan ratio at Chinese banks rose to 0.97 percent in the third quarter, compared with 0.96 percent in the quarter before.
Shanghai Pudong Development Bank Co fell 4.7 percent to 9.64 yuan. China Minsheng Banking Corp decreased 4.4 percent to 8.55 yuan. China Merchants Bank Co slipped 3.3 percent to 10.33 yuan.
Security-related shares surged after the communique said China will set up a state security committee to “improve systems and strategies to ensure national security.”
Bluedon Information Security Technologies Co surged by the daily limit of 10 percent to 13.40 yuan. Beijing Aerospace Changfeng Co jumped 10 percent to 11.89 yuan.
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