.contact us |.about us
News > Business News ...
Search:
    Advertisement
Shares eke out weak rebound by tech stocks
( 2003-08-27 09:24) (China Daily)

China shares eked out a weak rebound led by tech counters yesterday after steep falls over the past week helped ease selling pressure, brokers said.

The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, finished 0.21 per cent higher at 1,425.212 points.

While the Shenzhen sub-index also gained 7.32 points, or 0.23 per cent to close at 3188.39 points.

"Recent falls have eased selling pressure and led to a technical rebound," said analyst Zhang Jun at Guotai Junan Securities.

The benchmark index has already suffered a 4.63-per-cent fall since the start of the month on liquidity pressure from an abundance of share offers and a tightening of bank loans.

Analysts said the rebound, led by tech stocks that posted good earnings, was aided by speculative buying in poor earners such as chicken breeder Shanghai Dajiang Group Co.

Chronic loss-making Dajiang was the most actively traded B share and one of the top gainers in Shanghai, ending up 2.89 per cent at US$0.285.

BOE Technology Co, a television parts maker turned high-tech hopeful, was the second most actively traded counter, rising 2.88 per cent to HK$5.00.

"Still, the index is likely to move at low levels in the near term on lack of follow-through buying," said analyst Yang Weidong at Minfa Securities.

Trade was slack amid weak investor confidence, while the strength in tech counters was not enough to pull up the entire market over the longer term, analysts said.

The Shanghai B-share index climbed 1.12 per cent to 99.906 points while its Shenzhen counterpart edged up 0.76 per cent to 225.56.

A shortfall of money prompted a rush by Chinese banks to obtain repurchase agreements issued by the central bank yesterday in the government's first move to inject money into the market in seven months, dealers said.

The People's Bank of China issued seven-day repos in open market operations to inject 60 billion yuan (US$7.25 billion) into the market - the first injection since late January and hot on the heels of a weekend hike in bank reserve requirements.

"The repos were snapped up, and, of course, fully subscribed," said a dealer at a major Chinese State-owned bank. "We are really short of money, the market is really short of money after a slew of central bank moves to tighten supply."

Reflecting the shortfall, annual rates for benchmark seven-day treasury bond repos, traded on the Shanghai stock exchange, rose 0.75 percentage points to finish at 4.77 per cent.

That meant costs for banks and other financial institutions to borrow money on the market had reached their highest levels since January 23, when the benchmark interest rate finished at 5.66 per cent, traders said.

Beijing said it would raise reserve requirements to 7 per cent from 6 per cent from September 21, asking banks to place a larger proportion of deposits with the central bank to drain excess money amid fears of economic overheating.

It was a long-anticipated move aimed at mopping up funds from the market to head off potential inflationary pressure.

The broad M2 money supply rose 20.7 per cent at the end of July from a year earlier, while outstanding loans in the first half of the year grew an annual 23 per cent to 15.9 trillion yuan (US$2 trillion) - a pace analysts deemed a cause for concern.

But dealers said banks were now setting aside funds to meet the higher requirement, creating a short-term squeeze in supply. There were also fears of a more acute shortage in the near term, they added.

 
Close  
   
  Today's Top News   Top Business News
   
+WHO: Bird flu death rises to 15; vaccination recommended
(2004-02-05)
+Solana: EU ready to lift China arms embargo
(2004-02-05)
+Nation tops TV, cell phone, monitor production
(2004-02-05)
+Absence ... still makes China hot
(2004-02-05)
+Hu: Developing world in key role
(2004-02-04)
+KFC: We operate normally in China despite bird flu outbreaks
(2004-02-05)
+Starbucks takes aim at China chain
(2004-02-05)
+Former Microsoft China chief gets new job
(2004-02-05)
+Private airline prepared for take off
(2004-02-05)
+Investors lured by call of siren
(2004-02-05)
   
  Go to Another Section  
     
 
 
     
  Article Tools  
     
 
 
     
  Related Articles  
     
 

+Regulators plan long-term boost for bourses
2003-08-18

+Sluggish stock market plummets to 7-month low
2003-08-19

+7-month lowest close leads to tech rebound
2003-08-20

+Stock ticks 7-month low on bearish sentiment
2003-08-21

+Shares slipped as huge IPO brings woes
2003-08-22

+Hang Seng surges as blue chips gain
2003-08-22

+Shares up on hope of economic recovery
2003-08-23

+Indices continue slide as bank stocks cash out
2003-08-26

   
        .contact us |.about us
  Copyright By chinadaily.com.cn. All rights reserved