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Shanghai stocks drop on liquidity concern
By Ye Zhen |
December 20, 2012, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks dipped this morning, sending the key index to the lowest in a week, amid concern over market liquidity.
The key Shanghai Composite Index fell 0.52 percent, or 11.21 points to 2,151.03 points. Turnover stood at 36.5 billion yuan (US$5.9 billion) by the noon break.
The market performance was confined by the relatively tight liquidity this week due to the maturity of reverse repurchase agreements and the unlocking of massive non-tradable shares, Soochow Securities said in a report.
A total of 91 billion yuan worth of non-tradable shares will be allowed to circulate in the Shanghai and Shenzhen markets this week, up 88 percent from the previous week and marking the biggest weekly infusion this year, the brokerage said.
Meanwhile, data from Wind Information Co showed that reverse repurchase agreements worth of 102 billion yuan will mature this week, leading to a liquidity shortage among inter-bank market.
Lenders led the decline of heavily weighted financials amid fears over their profitability outlook. Bank of Communications forecasts the gross net profit of China's listing lenders to grow at 7 to 8 percent next year, down sharply from an increase of 29 percent in 2011.
The Industrial and Commercial Bank of China Ltd, the nation's largest lender, shed 0.5 percent to 4.08 yuan. Bank of Communications dropped 1.1 percent to 4.60 yuan. China Minsheng Banking Corp decreased 1.7 percent to 7.38 yuan.
The key Shanghai Composite Index fell 0.52 percent, or 11.21 points to 2,151.03 points. Turnover stood at 36.5 billion yuan (US$5.9 billion) by the noon break.
The market performance was confined by the relatively tight liquidity this week due to the maturity of reverse repurchase agreements and the unlocking of massive non-tradable shares, Soochow Securities said in a report.
A total of 91 billion yuan worth of non-tradable shares will be allowed to circulate in the Shanghai and Shenzhen markets this week, up 88 percent from the previous week and marking the biggest weekly infusion this year, the brokerage said.
Meanwhile, data from Wind Information Co showed that reverse repurchase agreements worth of 102 billion yuan will mature this week, leading to a liquidity shortage among inter-bank market.
Lenders led the decline of heavily weighted financials amid fears over their profitability outlook. Bank of Communications forecasts the gross net profit of China's listing lenders to grow at 7 to 8 percent next year, down sharply from an increase of 29 percent in 2011.
The Industrial and Commercial Bank of China Ltd, the nation's largest lender, shed 0.5 percent to 4.08 yuan. Bank of Communications dropped 1.1 percent to 4.60 yuan. China Minsheng Banking Corp decreased 1.7 percent to 7.38 yuan.
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