| Mainland's stock index is little changed |
BEIJING, March 20 -- Mainland's key stock index wavered between gains and losses. Large companies, such as Citic Securities Co fell after the securities regulator barred the use of stock-sale proceeds to invest in other shares.
"The rule will affect liquidity and have a negative impact on fund inflow," said Yan Ji, an investment manger at HSBC Jintrust Fund Management Co in Shanghai, which manages about 517 million U.S. dollars, according to Bloomberg.
Jiangxi Copper Co jumped by the daily trading limit after it announced plans to buy assets from its parent.
The Shanghai Composite Index, which tracks the bigger of domestic stock exchanges, slipped 0.1 percent to 3010.33. The Shenzhen Composite Index, which covers the smaller one, added 0.7 percent to 787.82.
Companies will also be barred from using stock-sale proceeds to buy initial public offerings, derivative products and convertible bonds, the China Securities Regulatory Commission said today. The Beijing-based regulator said it will step up its monitoring on the use of share-sale proceeds, without saying when the rules take effect.
Among companies hurt by the rule, Citic Securities Co, China's biggest publicly traded brokerage, slid 0.53 yuan (6.84 US cents), or 1.3 percent, to 40.65 yuan. Kweichow Moutai Co, the maker of Moutai, the fiery liquor used at official banquets, retreated 2.42 yuan, or 2.5 percent, to 94.96 yuan. Wuhan Iron & Steel Co, the country's third-biggest steelmaker, slid 0.16 yuan, or 1.7 percent, to 9.04 yuan.
China's securities regulator, Shang Fulin, is reinforcing moves by central bank governor Zhou Xiaochuan to slow the economy by curbing speculation in the real estate and stock markets. China's economy expanded 10.7 percent last year.
Jiangxi Copper, China's largest listed producer of the metal, surged 1.64 yuan, or the 10 percent daily cap, to 18.03 yuan as it resumed trading today.
The company plans to raise as much as 4 billion yuan selling yuan-denominated shares to buy assets and fund expansion.
The copper producer will issue no more than 290 million shares, equal to 9.1 percent of enlarged share capital, it said in a statement today.
"The plays of good corporate earnings and buying good-quality assets from parents are what investors prefer now," said Yan of HSBC Jintrust Fund Management.
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