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Stocks dip 0.22% as new IPOs expected to drain cash
By Hu Xiaocen |
December 22, 2011, Thursday
|
Online Edition
Online Edition
THE Shanghai Composite Index dipped as investor confidence crashed on news that hundreds of billions of yuan is to be raised by IPOs next year, along with an expected year-end credit crunch.
The key index dipped by 0.22 percent to 2,186.30 points. The textiles sectors plunged by 3.43 percent, leading the fall.
According to a report released by Ernst & Young yesterday, small-to-medium sized private enterprises will flock to be listed on the A-share market in the first half year of 2012.
"We project that, more than 280 billion yuan (US$ 44 billion) would be raised from the A-share market in 2011. The figure will grow to 300 billion in 2012," said Wang Yang, partner of Ernst & Young.
This news could spell more trouble for the stock market that is already seeing investor funds drying up.
"The investors encounter huge losses amid the market endless tumble. The pressure from uncontrolled new IPOs is unbearable to the market," said Money Weekly in a commentary.
A survey found that 87.2 percent of stockholders suffered losses in the stock market this year, as the index has slumped by 23 percent so far this year, and is unlikely to rise before the New Year next week.
Worries about a liquidity crunch rose, as it is a routine for banks to absorb as much cash as they can to meet the year-end reserve requirement target, while people preparing for the holiday season will also increase the demand for cash.
"The market is expected to repeat the fluctuations in short term. Investors are advised to avoid the risk," said Morgan Stanley Investment in a report posted after trade close.
The key index dipped by 0.22 percent to 2,186.30 points. The textiles sectors plunged by 3.43 percent, leading the fall.
According to a report released by Ernst & Young yesterday, small-to-medium sized private enterprises will flock to be listed on the A-share market in the first half year of 2012.
"We project that, more than 280 billion yuan (US$ 44 billion) would be raised from the A-share market in 2011. The figure will grow to 300 billion in 2012," said Wang Yang, partner of Ernst & Young.
This news could spell more trouble for the stock market that is already seeing investor funds drying up.
"The investors encounter huge losses amid the market endless tumble. The pressure from uncontrolled new IPOs is unbearable to the market," said Money Weekly in a commentary.
A survey found that 87.2 percent of stockholders suffered losses in the stock market this year, as the index has slumped by 23 percent so far this year, and is unlikely to rise before the New Year next week.
Worries about a liquidity crunch rose, as it is a routine for banks to absorb as much cash as they can to meet the year-end reserve requirement target, while people preparing for the holiday season will also increase the demand for cash.
"The market is expected to repeat the fluctuations in short term. Investors are advised to avoid the risk," said Morgan Stanley Investment in a report posted after trade close.
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