Chinese share prices continued their downward slump Monday on
the back of a mammoth trading debut by PetroChina and fears over
further government polices to cool down the sizzling equity
markets.
The benchmark Shanghai Composite Index concluded the daily
trading at 5,634.45 points, down 2.48 percent from the previous
trading day.
The Shenzhen Component Index ended at 18,116.88 points, down
447.46 points, down 2.41 percent.
However, the combined daily transaction volume on the two
exchanges increased sharply to 197.2 billion yuan (US$26.4 billion)
from the 158.4 billion yuan on the previous trading day.
Market observers said nearly 70 billion yuan in turnover was
chalked up in the trading of PetroChina's shares.
The largest oil and gas producer in China was listed in Shanghai
Monday and replaced the Industrial and Commercial Bank of China as
the biggest heavyweight on the Shanghai bourse. It closed the day
at 43.96 yuan, down from the opening price of 48.6 yuan, but still
163 percent higher than its initial public offering (IPO)
price.
The trading debut made the New York and Hong Kong-listed energy
conglomerate the highest-valued company in the world by market
capitalization. Its IPO, which raised nearly nine billion dollars
through the sale of four billion shares, is the world's biggest
this year and the largest in the history of the Chinese
mainland.
Premier Wen Jiabao said over the weekend that the Chinese
government will rely on market law, instead of administrative
measures, to prevent serious fluctuations on the stock markets.
This dampened the market mood and aggravated fears that new
government policies aimed at cooling down the markets were
imminent.
In addition, the industry watchdog, China Securities Regulatory
Commission, issued a notice on Sunday, urging fund companies to
avoid blind expansion and forbidding them to mislead consumers in
marketing or engage in speculative investment.
Fund firms have been ordered not to expand the scale of their
funds six months after the day they issued statements or started
promotions for the issuance of new products.
Latest figures from the CSRC showed that the aggregate equity of
China's funds has shot up by nearly 10 percent in more than one
month to 3.31 trillion yuan by the end of October, almost
quadrupling the figure at the beginning of the year.
Blue chips from petrochemical and financial sectors led the
downward adjustment on Monday.
Sinopec, China's largest oil refiner, plummeted 8.88 percent;
the Industrial and Commercial Bank of China fell 4.16 percent and
Bank of China, 3.83 percent.
Among the heavyweights, only COSCO, Air China and Baosteel saw
their share prices going up.
The Hushen 300 Index, tracking one fifth of the total stocks
listed on the two bourses, closed at 5,360.31 Monday, down 2.06
percent, or 112.62 points, from the previous close.
(Xinhua News Agency November 6, 2007)
