Shares fall on news Mexican rail deal voided
Print Edition
SHANGHAI stocks fell yesterday after rising to over a two-year high as railway firms plunged after Mexico revoked a bullet train deal with a Chinese-led consortium, overshadowing gains made by brokerages on robust earnings.
The Shanghai Composite Index shed 0.32 percent to 2,418.17 points, reversing from an earlier rise to 2452.42, the highest since June 2012. The index lost 0.08 percent for the week.
Railway companies lost steam after media reports said the Mexican government unexpectedly canceled a multi-billion-dollar contact to build a high-speed train line that was granted to a consortium led by China Railway Construction Corp earlier this week.
Doubts had been raised over the fairness of the project’s bidding process in which CRC and its four Mexican partners were the only participants.
CRC dropped 4.9 percent to 6.73 yuan (US$1.1) while its Hong Kong-listed shares fell 5.8 percent.
Haitong Securities said the market was in a downward correction after gaining in earlier sessions, but the broker remained optimistic about the medium-term outlook, especially for brokerages and shares in the military sector.
The market decline yesterday was narrowed by gains made by 19 listed brokerages which posted a 55 percent surge in third-quarter net profits.
CITIC Securities rose 3.4 percent to 13.63 yuan. Haitong Securities added 3.3 percent to end at 10.88 yuan.
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