Chinese shares close flat

SHANGHAI - Chinese share prices closed flat Friday amid fresh fears of possible government measures to cool the country’s booming economy, dealers said.

By (AFP)

Published: Fri 13 Jul 2007, 4:40 PM

Last updated: Sat 4 Apr 2015, 10:20 PM

Despite gains by insurance companies, the market was expected to consolidate amid fresh concerns about imminent curbs on liquidity after robust growth in foreign reserves in the first half 2007, they said.

The benchmark Shanghai Composite Index, which covers A and B-shares, closed 1.60 points or 0.04 percent lower to 3,914.40.

Turnover fell to 56.38billion yuan (7.42 billion US dollars), the lowest level in five months, from 70.29 billion yuan in the previous session.

The Shanghai A-share Index was down 1.62 points or 0.04 percent at 4,106.21 on turnover of 55.03 billion yuan and the Shenzhen A-share Index fell 1.83 points or 0.16 percent at 1,137.96 on turnover of 26.02 billion yuan.

The yuan ended at 7.5695 against the US dollar, down from Thursday’s finish at 7.5661.

Heavyweight insurance companies outperformed the market amid optimism over stronger-than-expected first-half interim results.

The central bank said Wednesday that China’s foreign exchange reserves topped 1.33 trillion dollars at the end of June, up 41.6 percent from a year earlier.

A total of 266.3 billion dollars were added to the forex hoard in the first half of 2007, outpacing the 2006 full-year rise of 247 billion dollars.

The announcement came one day after China said its trade surplus for June had soared 85.5 percent to a record monthly high of 26.91 billion dollars.

Both sets of figures gave rise to speculation about a potential interest rate hike or the cancellation or reduction on a 20 percent tax on bank deposit interest income.

Other first half economic data, including an expected double digit growth in gross domestic product, will be announced on Tuesday next week.

‘The market is weighed by worries about possible interest rate hike or cut in the interest income tax,’ said Cao Xuefeng, an analyst at West China Securities.

Zhang Yidong, analyst with Industrial Securities, said that investors are reluctant to trade in such weak sentiment because they are ‘unwilling to take the risk.’

Banks retreated led by Shanghai Pudong Development Bank, which lost 0.86 yuan to 36.44.

China Merchants Bank shed 0.34 yuan to 27.35, while China Citic Bank Corp fell 0.09 yuan to 9.05.

However, Industrial Bank, in which Hong Kong’s Hang Seng Bank holds a 15.98 percent stake, advanced 0.05 yuan to 37.99 after it projected net profit growth in the first half of over 90 percent year-on-year.

China Yangtze Power surged 0.88 yuan to 15.82 after saying that it had completed the acquisition of a 10 percent stake in Shanghai Electric Power.

Western Mining, the second-largest listed metal supplier by market capitalisation, tumbled 1.85 yuan to 30.99. Its shares surged 19.83 yuan or 147 percent to 33.31, against a public offer price of 13.48 yuan, on its Shanghai debut yesterday.

Airlines were under pressure on surging international crude prices.

Shanghai Airlines shed 0.21 yuan to 7.01, while China Southern Airlines fell 0.14 yuan to 8.90.

The Shanghai B-share Index was down 0.62 points or 0.22 percent at 279.29 on turnover of 1.35 billion US dollars but the Shenzhen B-share Index was up 6.25 points or 0.88 percent at 719.39 on turnover of 635.84 million Hong Kong dollars (82.58 million US dollars).

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