| Stocks fall for 3rd day as demand for shares slows |
SHANGHAI, June 26 -- CHINESE mainland stocks fell for a third day, set for the longest losing stretch this year, as a faltering rally cools demand for shares. Citic Securities Co dropped.
``High valuations are unnerving investors,'' said Lu Yizhen, who helps manage about US$640 million at Citic-Prudential fund Management Co in Shanghai. ``Inflows of liquidity aren't as strong as before.''
Industrial Bank Co rose after UBS AG raised the lender's target price and Cosco Shipping Co almost doubled in debut trade.
The Shanghai Composite Index, which tracks the bigger of domestic stock exchanges, retreated 1.96 percent to 3,863.811. The Shenzhen Component Index, which covers the smaller one, fell 2.14 percent to 12,828.773.
Investors opened a daily average of 271,000 brokerage accounts for investments in mainland shares and mutual funds this month, down from an average 440,000 in May, according to the China Securities Depository & Clearing Corp.
Citic Securities, China's biggest publicly traded brokerage, fell 0.79 yuan (10 US cents), or 1.4 percent, to 54.50 yuan. China Vanke Co, the nation's biggest listed property developer, slid 0.33 yuan, or 1.7 percent, to 18.95 yuan. Ping An Insurance (Group) Co, the country's second-biggest insurer, retreated 1.47 yuan, or 2 percent, to 72.79 yuan.
``The slowdown in new account openings is in line with our observation that both retail and institutional investors have become reluctant to invest funds in equities,'' said Kang Saibo, investment consultant at Fortis Haitong Investment Management Co in Shanghai.
The securities regulator said last week it will allow domestic brokerages to buy shares outside the mainland for the first time, a move that will siphon off capital to cool the rally.
Local investors are expected to buy a combined US$95 billion of overseas securities by the end of 2009 under the so-called qualified domestic institutional investor, or QDII, program, according to Z-Ben Advisors Ltd., which provides research on China's investment management industry.
The regulator also plans to speed up the pace of domestic share sales of Hong Kong-listed shares, such as China Construction Corp and PetroChina Co, to increase the stock supply.
Industrial Bank, a Chinese company in which Hang Seng Bank Ltd has a stake, gained 0.66 yuan, or 2 percent, to 33.70 yuan. UBS raised the lender's target price to 37.80 yuan from 36 yuan because of stronger first-half earnings, wrote UBS analysts Victor Wang and Sally Ng in a report today.
China Cosco Holdings, Asia's largest container line, almost doubled on its debut in Shanghai today compared with the offering price of 8.48 yuan. It rose 94 percent to 16.44 yuan at the break. The company raised 15.1 billion yuan selling domestic shares.
The following stocks rose or fell and the stock symbols are in brackets after companies' names.
Anhui Conch Cement Co, China's biggest cement maker, lost 2.60 yuan, or 4.7 percent, to 52.40 yuan. The company said it plans to sell 200 million new shares valued at 11 billion yuan in Shanghai to upgrade power equipment and boost output.
Yunnan Aluminium Co, China's fourth-largest aluminum maker by output, added 0.28 yuan, or 1.7 percent, to 16.57 yuan. The company said first-half profit may triple on higher product prices and a decline in production costs. Net income may rise by 150 percent to 200 percent in the six months ended June 30 from 88.2 million yuan.
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