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China's shares fell yesterday as sentiment, already vulnerable after a seven-week downtrend, was affected by poor corporate results from companies such as auto services firm the Guangdong Shengrun Group.
The Shanghai Composite Index dipped 12.45 points, or 0.8 percent, to end at 1536.52 yesterday, while Shenzhen's contracted 30.06 points, or 0.96 percent, to 3093.74.
Shanghai's hard currency B share index closed down 0.63 percent at 138.004 points while Shenzhen's fell 0.94 percent to 210.56 in thin trade.
Turnover on B share markets, also available to foreign investors, was only US$5.04 million in Shanghai and HK$40.45 million (US$5.19 million) in Shenzhen as weak market conditions reduced trading interest, brokers said.
Chronic loss-maker Shengrun was the biggest B share decliner, ending down 4.89 percent at HK$3.11 (39.8 US cents), after posting a heavy loss of 261.69 million yuan (US$31.61 million) for the first three quarters versus a loss of 19.62 million yuan (US$2.52 million) a year earlier.
"The market fall today was mainly due to weak sentiment, while poor corporate results added to investors' woes," said an analyst with Huatai Securities.
Share prices have fallen more than 8 percent since early September due to factors including poor corporate earnings and dwindling volumes caused by a raft of initial public offerings.
"We expected share indices to continue a downtrend partly because of the looming large IPO by CITIC Securities," the analyst said.
CITIC Securities plans to raise a gross 2.76 billion yuan (US$333.7 million) in the first IPO by a brokerage firm in China, but has yet to announce a timetable.
It will issue 400 million A shares, reserved for Chinese investors, a large offer by Chinese standards.
B shares in telecoms equipment maker Shanghai Posts and Telecommunications fell 0.75 percent yesterday to 79.2 US cents after it posted a year-on-year drop in net profits of 23.05 percent in the first nine months of the year.
The stock had already slid 2.68 percent a day earlier on expectations of poor earnings.
China's more than 1,200 companies are required to publish quarterly results before the end of October but most have yet to do so.
Analysts forecast the benchmark Shanghai composite index would fall to test the key 1,500-point level over the next few weeks.
Tsingtao Brewery yesterday said Anheuser-Busch Inc's stake in Tsingtao Brewery will rise to 27 percent from 4.5 percent after it subscribes to three lots of convertible bonds worth HK$1.42 billion (US$182.0 million) but its voting rights in the company will be capped at 20 percent.
Its shares rose by 3.71 percent to 8.39 yuan (US$1.01) yesterday.
(China Daily October 25, 2002)
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