China markets mixed as new listings weigh heavy
The Hong Kong market slid 1 percent today ahead of a series of new share issues that are expected to flood the market. Shanghai nudged 0.5 percent higher amid better than expected employment figures and reports that the regulator may slow down the pace of new listings in the market.
Turnover in Hong Kong dropped to HK$63bn billion from yesterday's HK$71bn. The China Enterprises Index, which represents top Hong Kong- listed mainland Chinese stocks, fell 1.4 percent
A new listing, Modern Media (HK:0072) underperformed, rising just 6.2 percent, while a placement of 13 million shares by Alibaba.com (HK:1688) saw the company's share price fall 6.7 percent. September will see 14 new issues, raising aproximately HK$70bn.
Mainland markets were boosted by a number of cheerful headlines however gains were limited.
Losing Shanghai shares almost as many as winners by 414 to 443, with turnover rising to RMB153bn from yesterday's RMB148bn. The Human Resources and Social Security minister Yin Weimin told the press today that new employment positions filled in urban areas hit 7.57 million in the first eight months of 2009, accounting for 84 percent of the government's target of 9 million for the whole year.
And the Shanghai Securities News reported on Wednesday that the China Securities Regulatory Commission is planning to slow the pace of initial public offerings in the domestic markets.
The country's banking regulator announced that RMB7.73 trillion of new loans were issued by banks in the first seven months and that it will step up financial risk control by increasing attention on banks' governance, capital adequacy ratio, risk management of loan concentration, provision coverage ratio and information transparency.
According to a a survey jointly conducted by China Banking Association and PricewaterhouseCoopers released today, most Chinese banks do not regard bad loans as a major problem over the next three years.
However the Bank of China (HK:3988, SH:601988)has already threatened to tighten credit to the steel sector in the second half of this year if its bad loan ratio deteriorates.Most banking shares fell slightly today.
Local press reported that China may soon release anticipated draft rules for foreign firms to list on the Shanghai Stock Exchange. Brokerage shares surged, including Sinolink Securities (SH:600109) which jumped to its 10 percent daily limit,Changjiang Securities (SH:000783) which was up 3.7 percent and Guoyuan Securities (SH:000728) which rose 4.5 percent. .
Metal shares made big gains as a weak dollar pushed up commodity prices. Western Mining (SH:601168) was up 5.2 percent. Jiangxi Copper (SH:600362) rose added 6.20 percent. Yunnan Chihong Zinc (SH:600497) was up 5 percent.
Famous Chinese spirit maker Wuliangye Yibin (SZ:000858) fell by 6.2 percent after admitting it was under investigation by the China's securities watchdog.
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