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Shanghai stocks close lower on liquidity fear
By Hu Xiaocen |
December 6, 2012, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks dropped in the afternoon after a two-day rally amid reports that new lending by China's top four banks fell significantly in November, stoking fears about a year-end liquidity crunch.
The Shanghai Composite Index shed 0.13 percent to 2,029.24 points today with a turnover of 58.5 billion yuan (US$9.3 billion).
China's "big four" banks - ICBC, China Construction Bank, Agricultural Bank of China and Bank of China - extended 168 billion yuan of new loans in November, down sharply from 220 billion yuan in the previous month, the 21st Century Business Herald reported today, citing an unnamed source in one of the banks.
The combined lending by the "big four" normally accounts for 30 percent to 40 percent of China's total lending.
"The A-share market performed worse than expected," Guotai Junan Securities said today at a conference in Guangzhou. "This year's fairly robust bond market has grown at the expense of stock market liquidity, which is compounded by a sluggish supply of bank credits."
Most lenders extended the rally from yesterday despite the concerns over market liquidity. The whole sector edged up 1 percent on average.
ICBC, the world's biggest bank by assets, gained 0.5 percent to 3.92 yuan. Huaxia Bank, the Beijing-based lender that was accused of not repaying wealth management products sold in Jiading, Shanghai, added 1.4 percent to 8.59 yuan. Shanghai Pudong Development Bank edged up 0.1 percent to 7.89 yuan.
The Shanghai Composite Index shed 0.13 percent to 2,029.24 points today with a turnover of 58.5 billion yuan (US$9.3 billion).
China's "big four" banks - ICBC, China Construction Bank, Agricultural Bank of China and Bank of China - extended 168 billion yuan of new loans in November, down sharply from 220 billion yuan in the previous month, the 21st Century Business Herald reported today, citing an unnamed source in one of the banks.
The combined lending by the "big four" normally accounts for 30 percent to 40 percent of China's total lending.
"The A-share market performed worse than expected," Guotai Junan Securities said today at a conference in Guangzhou. "This year's fairly robust bond market has grown at the expense of stock market liquidity, which is compounded by a sluggish supply of bank credits."
Most lenders extended the rally from yesterday despite the concerns over market liquidity. The whole sector edged up 1 percent on average.
ICBC, the world's biggest bank by assets, gained 0.5 percent to 3.92 yuan. Huaxia Bank, the Beijing-based lender that was accused of not repaying wealth management products sold in Jiading, Shanghai, added 1.4 percent to 8.59 yuan. Shanghai Pudong Development Bank edged up 0.1 percent to 7.89 yuan.
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