Shanghai shares closed lower at the noon break today as gains by firms reporting strong income growth were more than offset by drops in brokerages amid jitters over declines in trading commissions under a weak market scenario.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B chips, withdrew 0.87 percent from yesterday's close to finish at 4,419.07 at 11:30am. Gainers outnumbered losers 449 to 397.
Amid the losing pack, Citic Securities Co, the country's biggest listed broker, eased 2.14 percent to 66.35 yuan (US$9.22). Haitong Securities Co, the nation's No. 2 publicly-traded brokerage, lost 1.36 percent to 44.35 yuan.
"Worries over weaker brokerage business for securities houses are still weighing on the stock performance," said Wu Ke, a Zhongtian Investment Consulting Co analyst. "It's unlikely that brokerage counters will stage a strong rebound in the near term.''
China Life Insurance Co paced the index's drop by dipping 6.87 percent to 38.89 yuan as its earnings estimate failed to arouse investor sentiment. The country's top insurer said today that its net profit last year grew more than 50 percent from a year earlier partly due to a jump in investment returns.
Amid the winning pack, Shandong Gold Mining Co, China's second-largest gold miner, increased 0.98 percent to 208 yuan. The company said today that its net income for 2007 probably rose more than 50 percent from 128 million yuan a year earlier.
Steel makers drifted higher in the morning, led by Baotou Steel Co, which grew 1.40 percent to 7.26 yuan. The firm said its 2007 profit probably rose more than 150 percent after the company sold shares to buy assets from the parent.
Baoshan Iron & Steel Co, China's biggest steel maker, was up 0.26 percent at 15.15 yuan while Wuhan Iron & Steel Co, the nation's fifth-biggest steel maker, climbed 1.74 percent to 18.10 yuan.
China's Laiwu Steel Co jumped 4.74 percent to 21.20 yuan after saying that it has gained approval from the China Securities Regulatory Commission to float up to two billion yuan in corporate bonds.
Shares of China Minsheng Banking Corp dropped 3.98 percent to 12.29 yuan. The nation's first privately-owned bank said today it plans to rise up to 15 billion yuan selling bonds to increase its capital.
The Shanghai-listed bank will sell 10-year bonds attached with call warrants to buy shares, it said in an exchange filing. Shareholders will vote on the plan on February 18.
(Shanghai Daily January 30, 2008)
