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Shares drop on jitter over weak economy
By Ye Zhen |
June 13, 2013, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks plunged to a six-month low after a three-day Dragon Boat Festival holiday as the market suffered from poor data pointing to a slackening economic growth in China, speculation on the reboot of new share offering and a glut of unlocked shares newly eligible for sale.
The benchmark Shanghai Composite Index dropped 62.54 points, or 2.83 percent, to 2,148.36, the lowest close since December 13. Daily trading volume was 79.7 billion yuan (US$13.1 billion).
"Weak economic growth as reflected in the latest data, concern over the resumption of initial public offerings and the unlocking of massive non-tradable shares are among the main factors that led to the market drop," Guosen Securities said in a note today.
The latest data released over the weekend suggested that the world's second largest economy is losing momentum as reflected in weaker-than-expected consumer prices, lackluster foreign trade, slowing industrial production and tight money supply.
Exports rose a meager 1 percent in May, down from double-digit growth rates in months after China began to crack down on hot money inflows under the guise of trade, while imports posted a 0.3 percent decline, providing fresh signs of waning external and domestic demand.
The World Bank today cut its 2013 economic growth forecast for China to 7.7 percent, down from its earlier estimate of 8.4 percent because Chinese policymakers are shifting focus from investment-fueled growth to consumption-led growth.
Meanwhile, the market was hit by speculation that China's securities regulator will soon resume new listing approvals after the China Securities Regulatory Commission on Friday released draft rules on IPOs.
China didn't approve any new share offering in the past seven months in a campaign to crack down on false disclosures and profit manipulations.
Concern about the oversupply of shares also sent the market lower after data showed a total of 3.8 billion non-tradable shares are allowed to circulate on the Shanghai and Shenzhen exchanges this week after they were released from lock-up periods, an increased of 28.2 percent from a week earlier.
Cement producers tumbled the most. Anhui Conch Cement Co, China's biggest cement producer, fell 6.8 percent to 14.72 yuan. Gansu Qilianshan Cement Group Co slid 6 percent to 9.80 yuan.
Poly Real Estate, China's second-largest developer, lost 4.5 percent to 11 yuan. Gemdale Corp decreased 5 percent to 6.71 yuan.
Brokerages fell among financial stocks. CITIC, China's biggest listing broker, slumped 6.4 percent to 11.35 yuan. Haitong Securities declined 5.2 percent to 10.96 yuan. China Merchants Securities Co skidded 6.1 percent to 11.47 yuan.
The benchmark Shanghai Composite Index dropped 62.54 points, or 2.83 percent, to 2,148.36, the lowest close since December 13. Daily trading volume was 79.7 billion yuan (US$13.1 billion).
"Weak economic growth as reflected in the latest data, concern over the resumption of initial public offerings and the unlocking of massive non-tradable shares are among the main factors that led to the market drop," Guosen Securities said in a note today.
The latest data released over the weekend suggested that the world's second largest economy is losing momentum as reflected in weaker-than-expected consumer prices, lackluster foreign trade, slowing industrial production and tight money supply.
Exports rose a meager 1 percent in May, down from double-digit growth rates in months after China began to crack down on hot money inflows under the guise of trade, while imports posted a 0.3 percent decline, providing fresh signs of waning external and domestic demand.
The World Bank today cut its 2013 economic growth forecast for China to 7.7 percent, down from its earlier estimate of 8.4 percent because Chinese policymakers are shifting focus from investment-fueled growth to consumption-led growth.
Meanwhile, the market was hit by speculation that China's securities regulator will soon resume new listing approvals after the China Securities Regulatory Commission on Friday released draft rules on IPOs.
China didn't approve any new share offering in the past seven months in a campaign to crack down on false disclosures and profit manipulations.
Concern about the oversupply of shares also sent the market lower after data showed a total of 3.8 billion non-tradable shares are allowed to circulate on the Shanghai and Shenzhen exchanges this week after they were released from lock-up periods, an increased of 28.2 percent from a week earlier.
Cement producers tumbled the most. Anhui Conch Cement Co, China's biggest cement producer, fell 6.8 percent to 14.72 yuan. Gansu Qilianshan Cement Group Co slid 6 percent to 9.80 yuan.
Poly Real Estate, China's second-largest developer, lost 4.5 percent to 11 yuan. Gemdale Corp decreased 5 percent to 6.71 yuan.
Brokerages fell among financial stocks. CITIC, China's biggest listing broker, slumped 6.4 percent to 11.35 yuan. Haitong Securities declined 5.2 percent to 10.96 yuan. China Merchants Securities Co skidded 6.1 percent to 11.47 yuan.
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