Shares slide on lower turnover
Print Edition
SHANGHAI stocks fell for a second straight day yesterday as trading turnover also dipped amid rumors that the securities regulator is set to resume its approval of corporate refinancing.
The benchmark Shanghai Composite Index closed down 0.9 percent at 3,661.54 points, as trading activity slumped 26 percent from Wednesday to 357.5 billion yuan (US$57.6 billion).
Reports citing unnamed market insiders as saying the securities regulator might resume corporate refinancing approvals as early as today went viral yesterday, triggering concerns that any new offerings would drain funds from existing shares.
As with the suspension of IPOs, a temporary curb was placed on corporate refinancing last month as part of the government’s efforts to shore up the stock market.
Goldman Sachs estimated that China has already spent about 900 billion yuan on such measures, which equates to 1.6 percent of the market’s total capitalization and 2.2 percent of its free-float capitalization.
“A resumption of refinancing would definitely weigh on the market as investor confidence has not yet recovered,” Shenwan Hongyuan Securities said in a note.
Financial counters were the major drags yesterday, as CITIC Securities fell 2.2 percent to 19.85 yuan and the Bank of Communications dropped 0.88 percent to 6.76 yuan.
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