Shares dip on tight liquidity after PBOC withdrew funds
Print Edition
Shanghai stocks yesterday fell for the second day in a row on tight liquidity as monetary rates rose after the People’s Bank of China drained funds from the market.
The Shanghai Composite Index lost 0.83 percent to 2,046.59 points.
The PBOC yesterday drained 52 billion yuan (US$8.4 billion) via repurchase agreements from the money market, after withdrawing 46 billion yuan on Tuesday. The seven-day repo rate, a gauge of market liquidity, jumped 94 basis points to 4.83 percent yesterday.
In a report, the Bank of China said expectations are high that the central bank will lower the reserve requirement for the commercial banks to bolster the economy.
Speculation that the recently revised listing rules announced by the China Securities Regulatory Commission may see initial public offerings resume as early as next month cast a shadow over investors as the move will drain more liquidity.
Brokerages fell, with Haitong Securities Co shedding 0.6 percent to 9.36 yuan. Citic Securities Co lost 0.8 percent to 10.54 yuan and China Merchants Securities Co fell 1.7 percent to 10.18 yuan.
Shanghai Xinhua Media Co lost 1.5 percent to 9.53 yuan. Jiangsu Phoenix Publishing and Media Corp shed 2.8 percent to close at 9.23 yuan, and Anhui-based Time Publishing and Media Co tumbled 6.2 percent to finish at 16.19 yuan.
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