China equities rebound almost 6 pct on regulator comment
20/8/2008 17:45
Chinese shares surged about 6 percent in the morning session today,
snapping a prolonged losing trend, as investors reacted to last night's
statement by insurance regulators expressing support for the market.
The
benchmark Shanghai Composite Index rebounded 5.89 percent, or 138.17 points, to
2,482.64. The Shenzhen Component Index closed out the morning at 8,460.12
points, up 496.55 points, or 6.24 percent.
Aggregate turnover hit 44.1
billion yuan (US$6.4 billion), a big rise from yesterday's full-day total of
30.5 billion yuan. Gains outnumbered losses by 1,401-1 on the two bourses as of
11:30 am
The only loser was ST Changhe Automobile, which lost 1.01 percent to
close at 6.88 yuan in the morning session, after reporting unexpectedly low
first-half profits.
Shares opened lower following an overnight decline on
Wall Street. The Shanghai index opened at 2,332.48 points, down 0.51 percent,
while the Shenzhen index dropped 0.57 percent at the opening to 7,918.57
points.
However, both bourses saw a broad-based rebound at about 10:00 am,
driven up by financial issues -- banks, securities, and insurance
shares.
Analysts attributed the gains to a turnaround in investor
confidence.
According to analysts, investors took heart from a supportive
statement by the China Insurance Regulatory Commission, which said several hours
after the market close yesterday that it would always firmly support the
development of the country's share market. However, it didn't elaborate on how
it would do so.
There was also market talk that the government would allow
brokers to underwrite secondary offering of shares that have been "locked-up,"
although again, no details were available. However, such issues would be a boost
to securities firms.
This week, there is a large volume of shares coming out
of lock-up periods, amounting to 18.9 billion shares valued at 120 billion
yuan.
China Life Insurance, the country's leading life insurer, rose 8.26
percent to 25.16 yuan, while Ping An Insurance, another life insurance giant,
saw its shares gain 8.28 percent to close at 44.45 yuan. Insurers benefited from
overall investor confidence in the financial sector.
China Merchants Bank
rose 7.13 percent to close the morning at 23.45 yuan. The Shanghai-listed lender
reported first-half net profit of 13.245 billion yuan yesterday, up 116.42
percent year-on-year.
CITIC Securities, the country's largest listed broker,
gained by the daily 10 percent limit to close the morning at 18.70
yuan.
Shares slid more than 5 percent on Monday to a 20-month
low.
Xinhua
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