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China's shares closed mixed yesterday, but stationery maker Daying Modern Agricultural Co fell sharply, hit by rumors related to its major shareholder, brokers said.
The benchmark Shanghai composite index, grouping A and B shares, closed up 0.267 points, or 0.02 percent at 1,576.528 points, while the Shenzhen sub-index dipped 4.84 points, or 0.14 percent to close at 3498.85.
Shanghai's B-share index closed down 0.71 percent at 118.648 points but its Shenzhen counterpart rose 0.38 percent to 226.43, buoyed by a reverse in fortune for auto stocks. Hard-currency B shares are open to Chinese and foreign investors.
Shanghai-listed Daying's B shares ended down 5.95 percent at US$0.522 on rumours that Chinese real estate tycoon Chau Ching Ngai had been arrested. Its yuan-denominated A shares fell 4.12 percent to 10.25 yuan (US$1.24).
Both Daying's A and B shares were among the top 10 fallers.
Brokers said Daying shares dropped after domestic media reports on Chau's problems triggered worries about the company's prospects.
Daying spokesman Yu Youqing said he was not aware what was going on with Chau, the company's largest shareholder, but said Daying's operations were normal.
Daying's biggest shareholders are subsidiaries of Chau's flagship trade and property conglomerate, Shanghai Nongkai Development (Group) Co, whose officials declined to comment.
Hong Kong's corruption watchdog has interrogated Chau's wife, Mo Yuk Ping, chairman of Shanghai Merchants Holdings Ltd, and searched their home and offices, a source close to the probe said yesterday.
Trading in Chau-controlled Shanghai Merchants and another Hong Kong-listed firm, Shanghai Land Holdings Ltd, was halted yesterday pending clarification of the media allegations.
But yesterday's trade on the Chinese mainland markets was propelled mainly by sharp fluctuations in auto stocks, brokers said.
Shenzhen-listed Chongqing Changan Automobile Co's B shares closed up 0.29 percent at HK$7.03 (90 US cents), helping the Shenzhen B-share index reverse an earlier fall.
The stock had initially fallen 2.28 percent in early trade yesterday.
Chang'an has surged 142 percent since October 28 as auto stocks have been favoured since last year due to a boom in the domestic auto industry.
Shanghai's A-share index nudged up 0.03 percent to 1,650.77 points while its Shenzhen counterpart edged 0.18 percent higher to 465.22 points.
China's yuan ended flat at 8.2768 against the US dollar yesterday, remaining at the high end of a central bank-set trading range as hard currency supply on the market stayed ample, dealers said.
The yuan moved narrowly between 8.2767 and 8.2770, near the firm end of a tiny range of 8.2760 to 8.2800 set by the People's Bank of China.
Turnover rose to a healthy US$620 million from Friday's US$560 million.
A poll of 10 economists showed most did not expect a change in the yuan's range this year.
While minor changes to its peg to the dollar are possible, economists on average expect the currency to remain pegged at some level for a further six years.
Analysts said a healthy trade surplus over the past few years had ensured a strong dollar supply and was likely to keep the yuan firm, at around 8.2770, in the near term.
"Most deals were seen at 8.2768, helped by a steady hard currency inflow to the market," said a bank dealer in Beijing.
(China Daily June 3, 2003)
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