Stocks finish with turnover of 133.2b yuan, lowest in 3 months

Stocks finish with turnover of 133.2b yuan, lowest in 3 months

Chinese stocks had another day of frequent price adjustments today, with the lowest turnover in three months. The Shanghai Composite Index closed at 3,836.29, up 15.59 points or 0.41 percent.
Total turnover of stocks enclosed by the two major indices was 133.2 billion yuan, the lowest since April.

Opening lower from 3,800.23, the benchmark Shanghai Composite Index went through the morning session with modest swings and toughed the highest point of 3,859.86 around 10:30. When trading resumed after the noon break, it slid all the way down to the lowest at 3,724.19 in the first half, but then turned around and managed to finish slightly higher than the previous closing.

Shanghai Composite Index
Of the A shares listed on the Shanghai bourse, 415 went up, but 370 dropped and 54 ended unchanged. Qingdao Aucma grew 10.07 percent to 8.2 yuan as the top gainer, followed by Shandong Dacheng Pesticide and Changchun E&T Development Group, also sealed with the maximum cap of 10 percent growth. Aeolus Tyre, however, dropped 10.02 percent to lead the fall.

China Unicom, with the largest trading volume, added up 0.24 yuan to its share price and Baoshan Iron and Steel, with the largest transaction value, gained 0.71 yuan by the closing.

The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, opened lower from 12,492.71 and closed at 12,475.16, 71.29 points or 0.57 percent lower than Friday's closing. It went through the day within a range from 12,145.00 to 12,675.60.


Shenzhen Component Index
Of its A shares, 295 were up, 242 went down and 77 ended flat. Foshan Plastic Group rose 10.12 percent on top of the gainer's list. But Fujian Sanmu Group lost 10 percent as the biggest loser. Largest traders TCL and China Vanke were both down more than 2 percent.

Stocks in the culture and media, construction and transportation industries were the best performers today. Beijing CCID Media Investments rose 5.14 percent to lead the surge of media shares.

B shares were down. Of the 109 listed B shares, 80 slid and five finished flat. Shanghai Haixin Group was up 6.67 percent as the largest gainer. Most closed-end mutual funds listed on the exchanges plunged today, with both the fund indices down more than 2 percent.


The mainland's main stock index tumbled more than 2 percent Friday, ending June with its biggest monthly loss since May 2005, because of fear that government policies would suck funds from the market.

The stock market lost 1,118.1 billion yuan in market value last week, caused by deep slumps. Total market value of all securities listed on the two exchanges stood at 16,623.2 by the closing of last Friday, down 6.7 percent than a week before on June 22.

The stock market by last Friday has been ripped off 2,400.3 billion yuan or 12.7 percent, from one month earlier, or May 29, the day before the stamp tax rate was lifted to 3 percent overnight.

Investor confidence was also damaged. Last Thursday, the new A-share accounts opening hit a new low for three months at 107,991. New accounts of B shares and mutual funds also dropped.

New Account Opening

Source: China Securities Depository and Clearing Co Ltd
Date # A share #B share #Fund #Total
2007-06-25 #156,151 #1,020 #77,653 #234,824
2007-06-26 #129,713 #1,181 #51,850 #182,744
2007-06-27 #115,143 #1,107 #42,782 #159,032
2007-06-28 #107,991 #1,014 #38,312 #147,317




The Standing Committee of the National People's Congress approved Friday US$200 billion worth of special yuan treasury bond issues to fund China's new overseas investment agency. It also authorized the State Council, or Cabinet, to cut or scrap the 20 percent tax on interest earned from bank deposits.

Last Friday, Yi Gang, assistant governor of the central bank said the People's Bank of China will pay US$200 billion to buy the special bonds of 1.55 trillion yuan from the Ministry of Finance (MOF). The central bank will recognize the purchase once and for all in its balance sheet.

Then MOF will invest US$200 billion, the exact amount paid by the central bank, to the new State foreign exchange investment company. The central bank, on the other side, will issue the 1.55 trillion special bonds, in different times, to the market to control money supply and reduce liquidity.

The issuance of the special bonds is categorized to a "neutral" macro economic policy, and will bring moderate effects to the capital market, said Yi on a forum Saturday. Yi said the central bank will issue the bonds in times based on the growth of money supply, just like the other central bank bills that drain in capital from the market. And top priority will be given to the stability of the financial markets, Yi added.

Analysts agreed and said the market-oriented monetary policy will have less "shock" influence than the fiscal ones such as the stamp tax hike.

Sources from MOF said along with the growing gap between deposits and loans, and the widening of investment channels by insurers and the social security fund, there is an increasing demand for T-bonds. The large amount of the special T-bonds to be issued by the central bank in times, may meet the demand from financial institutions for T-bond investment.