| Mainland's stock index slides from a record |
SHANGHAI, Jan. 23 -- Key stock index on the Chinese mainland slipped from a record as investors judged recent gains excessive. China Vanke Co and Suning Appliance Co led the decline, Bloomberg reported today.
Shanghai Pudong Development Bank Co led lenders higher after it won regulatory approval to set up a fund-management arm.
The Shanghai Composite Index, which tracks the bigger of the mainland's stock exchanges, lost 2.2 percent to 2868.86. The Shenzhen Composite Index, which covers the smaller one, dropped 2.5 percent to 682.75.
The Shanghai and Shenzhen 300 Index, which tracks yuan-denominated A shares listed on the mainland's two exchanges, lost 58.92, or 2.4 percent, to 2432.39 at the 11:30am local-time break. It's up 20 percent this year.
"As the market rises, investor psychology changes and some will decide to get out," said Wu Jianfei, who manages the equivalent of US$438 million with CCB Pricipal Asset management Co in Beijing. "I believe the market is supported by the fundamentals, but I do recognize that it operates on differences in perception."
China Vanke Co, the mainland's biggest property developer, slid 0.80 yuan (10.28 US cents), or 4.6 percent, to 16.50 yuan. Suning Appliance, the mainland's second-biggest home appliance retailer, fell 3.17 yuan, or 4.5 percent, to 67.62 yuan. Kweichow Moutai Co, the maker of Moutai, the fiery liquor used at official banquets, fell 4.80 yuan, or 4.2 percent, to 108.40 yuan.
The 14-day relative strength measure for the 300 index, a moving average based on whether the gauge rose or fell, was at 82.3 yesterday. A reading above 70 signals to some investors the index is poised for a fall.
Pudong Bank, the Chinese partner of Citigroup Inc, gained 0.31 yuan, or 1.4 percent, to 22.90 yuan. The lender said it won approval from China's banking regulator to start a fund venture with French insurer Axa SA. Pudong Bank will own 51 percent of the venture, it said.
China let domestic lenders set up fund ventures with overseas investors since February 2005, to develop capital markets and offer another income source for banks, which get as much as 90 percent of earnings from interest spread.
China Merchants Bank Co, the mainland's third-biggest publicly traded lender, rose 0.34 yuan, or 1.9 percent, to 17.87 yuan. China Minsheng Banking Corp, the mainland's first privately controlled lender, advanced 0.23 yuan, or 2.2 percent, to 10.60 yuan.
Elsewhere, China Petroleum & Chemical Corp, Asia's biggest oil refiner, also known as Sinopec, added 0.14 yuan, or 1.5 percent, to 9.54 yuan. The company said its shareholders yesterday approved a plan to issue as much as US$1.3 billion worth of convertible bonds to fund a buyout of its units.
Shareholders also approved a plan to sell 10 billion yuan of bonds in the mainland to fund the construction of chemical projects, it said.
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