Shanghai shares slump most in 7 weeks
Print Edition
SHANGHAI stocks fell the most in seven weeks yesterday on continued worries about the resumption of initial public offerings, fading hopes for major economic stimulus, and rising money rates.
The Shanghai Composite Index slumped 1.6 percent to end at 2,003.49 points.
Investors were fearful over a flood of new shares after China’s securities regulator on Friday said it would start to review IPO applications of four companies tomorrow. All the four companies are planning to list on the Shanghai exchange.
CITIC Securities predicted the IPOs to start as early as in May and peak in August and September.
Xu Gao, an analyst at Everbright Securities, said policy-makers “are tolerant of the current economic situation and are unlikely to roll out aggressive measures to boost growth,” dashing investor hopes for a stimulus.
Rising money rates also overshadowed the market. The seven-day Shanghai Interbank Offered Rate, a gauge of funding costs, rose 52 basis points to a three-week high of 4.03 percent yesterday, data from the National Interbank Funding Center showed.
China Life Insurance Co fell 2.8 percent to 13.44 yuan (US$2.15) after posting a 28 percent fall in first-quarter profit.
Guanghui Energy Co, the first mainland firm to unveil a plan to issue preferred shares, dropped by the 10 percent daily limit to 7.19 yuan after its shares jumped last week.
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