Specter of bank debt casts cloud on stocks
By Feng Jianmin |
June 26, 2010, Saturday
|
Print Edition
Print Edition
SHANGHAI stocks fell yesterday on investor concerns about banks facing possible domestic debt problems following borrowings by provincial governments.
The Shanghai Composite Index dipped 0.54 percent, or 13.93 points, to close at 2,552.82. Turnover was 51.7 billion yuan (US$ 7.6 billion), comparable to yesterday's.
The barometer rose 1.58 percent for this week, the first weekly gain in five weeks.
"Over 48 percent of the debts of China's local governments in 2009 were paid by new borrowings," said Ye Tan, an independent economics expert. "It may result in a huge amount of bad loans for banks if the borrowing continues."
Small and medium caps led the losers. Shandong Inspur Software Co tumbled 5.77 percent to 13.07 yuan, and China National Software and Service Co lost 2.97 percent to 21.55 yuan.
Harbin Pharmaceutical Group Co shed 4.2 percent to 18.49 yuan, and Beijing Tongrentang Co dropped 5 percent to 23.19 yuan.
Insurers were among the few gainers benefitting from inflows of foreign capital due to the yuan's appreciation. China Life Insurance Co, the nation's biggest insurer, rose 0.97 percent to 25.10 yuan. China Pacific Insurance (Group) Co gained 2.87 percent to 23.66 yuan and Ping An Insurance (Group) Co added 0.68 percent to 47.51 yuan.
The Shanghai Composite Index dipped 0.54 percent, or 13.93 points, to close at 2,552.82. Turnover was 51.7 billion yuan (US$ 7.6 billion), comparable to yesterday's.
The barometer rose 1.58 percent for this week, the first weekly gain in five weeks.
"Over 48 percent of the debts of China's local governments in 2009 were paid by new borrowings," said Ye Tan, an independent economics expert. "It may result in a huge amount of bad loans for banks if the borrowing continues."
Small and medium caps led the losers. Shandong Inspur Software Co tumbled 5.77 percent to 13.07 yuan, and China National Software and Service Co lost 2.97 percent to 21.55 yuan.
Harbin Pharmaceutical Group Co shed 4.2 percent to 18.49 yuan, and Beijing Tongrentang Co dropped 5 percent to 23.19 yuan.
Insurers were among the few gainers benefitting from inflows of foreign capital due to the yuan's appreciation. China Life Insurance Co, the nation's biggest insurer, rose 0.97 percent to 25.10 yuan. China Pacific Insurance (Group) Co gained 2.87 percent to 23.66 yuan and Ping An Insurance (Group) Co added 0.68 percent to 47.51 yuan.
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