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BIZCHINA / Index & Statistics
Stocks break record 5,400 points despite interest hike
By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-17 17:37
In a full-scale inflation period, resource-related industries such as
mining, metal, oil and real estate are expected to be chased by investors
because of their scarcity, said analysts. Besides steel makers, stocks in
the media, transportation and petrochemicals industries were particularly
strong today and led the surges in the market.
The central bank raised interest rates for the fifth time this year on
Friday as part of its continuing efforts to arrest the rising inflation
graph and prevent the economy from overheating.
The benchmark one-year lending and deposit rates will be raised by 0.27
percentage points from September 15, the People's Bank of China, the
central bank, said on its website. This means the one-year lending rate
will increase from 7.02 percent to a nine-year high of 7.29 percent, and
the deposit rate will rise from 3.6 percent to 3.87 percent.
More pressure is coming from the expansion of the market capitalization.
A set of Hong Kong-listed heavyweights are set to drain the floating
capital from the market, helping alleviate excessive liquidity and also
slowing down the comparative growth of the market when they are floated
due to their large share bases, said analysts.
Hong Kong-listed China Construction Bank (CCB) kicked off online
subscription for its A shares today. CCB will net up to 58.05 billion
yuan selling yuan-backed 9 billion A shares in Shanghai, the largest on
the domestic market to date, Friday's China Business News reported.
CCB is offering shares at a price ranging between 6.15 yuan and 6.45 yuan
per share, the nation's second-largest bank said in a statement to the
Shanghai Stock Exchange. The online portion of the A shares are open for
subscription at the upper band of the price range, representing a price
to earnings ratio of 32.91.
Final pricing will be set on September 19, with A shares to begin trading
on the Shanghai bourse on September 25. Analysts estimate the total
amount frozen for the subscription could be as large as 2 trillion yuan,
one tenth of the country's gross domestic product of 2006, refreshing the
previous record by Bank of Beijing with 1.9 trillion yuan.
Shenhua Energy, China's largest coal producer, announced that it planned
to issue up to 1.8 billion A shares, or 9 percent of its expanded share
capital, for a listing in Shanghai. The China Securities Regulatory
Commission said it will review China Shenhua Energy's plan for an initial
IPO on the Shanghai Stock Exchange today.
Analysts said the company is expected to raise around 67 billion (US$8.92
billion) yuan from its Shanghai listing, which would be the mainland's
largest share sale yet or global largest IPO this year.
Growth in the domestic market hasn't dampened sales of overseas
investment products. Instead, China would experience a fund sales peak by
qualified domestic institutional investors (QDIIs) that will invest
mainlander's money in the peripheral markets, industrial experts said.
China's first overseas stock-oriented QDII fund has been approved to
increase its fund sales limit to 30 billion yuan, Friday's Shanghai
Securities Journal reported.
China Southern Fund Management Co Ltd said the State Administration of
Foreign Exchange had officially approved its application to increase the
fund sales, as subscription was near to 50 billion yuan in the first day,
far exceeding the scheduled limit of 15 billion yuan.
(For more biz stories, please visit Industry Updates)
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