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Stocks flat over concern for capital outflow
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SHANGHAI stocks ended nearly flat today in light trading as investors were cautious amid concern over capital outflow.
The key Shanghai Composite Index edged up 0.02 percent to 2,072.96 points. Shares worth 73 billion yuan (US$12 billion) changed hands, down from yesterday’s 89 billion yuan.
China’s yuan funds outstanding for foreign exchange decreased by 24.5 billion yuan (US$3.97 billion) from a month earlier in July after reporting the first decline since November 2012 in June, the People’s Bank of China, the central bank, said late yesterday.
The figure indicated the central bank sold a net 24.5 billion yuan worth of foreign exchange last month to offset the same amount of foreign exchange outflow.
“Capital continued to flow out of China in the wake of the slowdown in yuan appreciation and rising expectations that the US central bank will soon end its quantitative easing stimulus program,” said Li Huiyong, analyst with Shenyin & Wanguo Securities.
Coal and metal producers advanced while home appliance and furniture providers declined.
Anyuan Coal Industry Group Co gained 2.9 percent to 4.96 yuan. Yanzhou Coal Mining Co Ltd rose 2.6 percent to 10.70 yuan.
Asian shares were mixed today after suffering heavy losses yesterday amid concern the US Federal Reserve will soon taper back its bond purchase program, which would cut demand for emerging market assents.
“A panic selloff across Asian markets might weigh on investor sentiment, but the relatively cheap valuation would help A shares stay attractive,” said Chen Li, head of China equity strategy at UBS Securities.
Everbright slumped 5.9 percent to 10.27 yuan, on top of a 10 percent plunge yesterday, as the broker was blamed for wild fluctuations of the Shanghai market last Friday due to a glitch in its trading system.
Yang Jianbo, who is in charge of Everbright’s strategic investment department, has been suspended and is assisting the investigation into the trading blunder, National Business Daily reported yesterday.
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