China's shares ended slightly higher generally yesterday as an upcoming brokerage industry meeting sparked optimism about the struggling sector and triggered a surge in stocks such as CITIC Securities.
The official China Securities Journal reported that regulators will convene a high-level seminar of securities houses in Beijing next week to ask for feedback on developing an overcrowded securities industry battling poor earnings.
The Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, finished 0.08 percent higher at 1,487.37 points.
The index is still down 3.4 percent since mid-July, hit by a series of factors including a tightening of bank lending after an investigation into bank loans to embattled Shanghai property tycoon Zhou Zhengyi.
Analyst Luo Yanxin at Guohai Securities said: "Many investors have deemed the brokerage meeting a positive factor.
"But, while prices of brokerage counters were on the rise, there was apparent selling on the broader market - indicating sentiment is still weak," he said.
Market heavyweight CITIC Securities, the first brokerage to float shares in China, was one of the biggest gainers, jumping 4.07 percent to 7.67 yuan (93 US cents). It had slid 10 percent since mid-July.
Hong Yuan Securities, a tiny brokerage transformed from a trust firm, was yesterday's star performer, closing up 9.95 percent at 8.73 yuan (US$1.05).
Strength in brokerages also spilled over into other financial stocks, with China Merchants Bank, the biggest of the country's four listed lenders, rising 1.32 percent to 11.49 yuan (US$1.39).
Analysts saw limited further gains.
Huatai Securities analyst Chen Huiqin said: "The market is unlikely to get a great boost from the Beijing meeting unless some detailed steps to boost the market are worked out."
She added there was little opportunity for the composite index to rise beyond 1,500 points.
There was little impact from news that TV components maker BOE Technology would spend HK$1.05 billion (US$135 million) buying a stake in the world's second-largest computer monitor maker, TPV Technology Ltd.
BOE's B shares closed up 0.97 percent at HK$5.19 (67 US cents) while its A shares nudged down 0.01 percent to 12.30 yuan (US$1.49).
Shenzhen's B-share index inched up 0.04 percent to 234.54 points, while Shanghai's fell 0.13 percent to 110.989 points.
On the foreign-exchange market, China's yuan ended flat at 8.2773 to the US dollar yesterday, holding steady near the stronger side of its tightly managed range.
The yuan kept between 8.2771 and 8.2775 throughout the session. The People's Bank of China usually enforces a trading box of 8.2760 to 8.2800. Turnover climbed to a moderate US$540 million from US$300 million on Wednesday.
China reiterated at a meeting of officials from the "ASEAN plus three" grouping yesterday it had no immediate plans to alter its long-standing exchange-rate system.
On Thursday, the yuan firmed to 6.8864 against 100 Japanese yen from 6.8999 and strengthened versus the euro to 9.3749 from 9.4439. But it weakened versus the Hong Kong dollar to 1.0611 from 1.0609.
(China Daily August 8, 2003)
