Slowdown fears may see sell-off
By Lu Nengneng |
December 5, 2011, Monday
|
Print Edition
Print Edition
THE Shanghai stock market may see a sell-off this week as investor sentiment is likely to weaken again over fears of a slowdown in China's economy around the corner.
The Shanghai Composite Index lost 0.84 percent over last week to close at 2,360.66. It closed 1.1 percent lower last Friday, paring part of its biggest advance in six weeks last Thursday, as the market did not react robustly to the reserve requirement ratio cut the central bank unveiled last Wednesday to inject liquidity in the financial system.
"The cut was not strong enough to lift investor sentiment as caution prevailed in the market on Friday," Shenyin & Wanguo Securities said in a note.
The grim reality of China's Purchasing Managers' Index for November began to sink in last Friday as the reading, released on Thursday, fell from October's 50.4 to 49, showing industrial activities shrank and that an economic slowdown may be looming.
According to EPFR Global, an emerging market fund research firm, short-selling foreign investors had pulled US$344 million worth of funds from the domestic stock market last week.
Investors are aware the lock-up period of 9 billion shares worth 59 billion yuan (US$9.3 billion) will expire this week. This may prompt big shareholders to cash out.
According to Chinext, China's Nasdaq-style exchange, and the Small and Medium Enterprise Board, 258 executives sold 2.98 billion yuan worth of equities from their listed firms last month.
The Shanghai Composite Index lost 0.84 percent over last week to close at 2,360.66. It closed 1.1 percent lower last Friday, paring part of its biggest advance in six weeks last Thursday, as the market did not react robustly to the reserve requirement ratio cut the central bank unveiled last Wednesday to inject liquidity in the financial system.
"The cut was not strong enough to lift investor sentiment as caution prevailed in the market on Friday," Shenyin & Wanguo Securities said in a note.
The grim reality of China's Purchasing Managers' Index for November began to sink in last Friday as the reading, released on Thursday, fell from October's 50.4 to 49, showing industrial activities shrank and that an economic slowdown may be looming.
According to EPFR Global, an emerging market fund research firm, short-selling foreign investors had pulled US$344 million worth of funds from the domestic stock market last week.
Investors are aware the lock-up period of 9 billion shares worth 59 billion yuan (US$9.3 billion) will expire this week. This may prompt big shareholders to cash out.
According to Chinext, China's Nasdaq-style exchange, and the Small and Medium Enterprise Board, 258 executives sold 2.98 billion yuan worth of equities from their listed firms last month.
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