Little confidence in Chinese stock market despite new government measures
9/10/2008 17:11
Investor confidence in the Chinese stock market remains weak despite a
government measure to boost the economy.
Share prices only went up 0.56
percent in this morning session after the central bank announced both interest
rate and reserve-requirement ratio cuts last night.
The benchmark Shanghai
Composite Index opened 1.59 percent higher at 2,125.57 points, but dipped to
2,063.83 at 10 a.m. before closing in the morning at 2,104.01 points. The
Shenzhen Component Index declined 0.39 percent to 6,897.53 points.
The early
drop was largely due to PetroChina shares, which dipped to 11.9 yuan (about
US$1.74) before closing up 0.25 percent to 12.16 yuan.
Other heavyweights
also had poor performances. China Shenhua Energy Company fell 1.7 percent to 22
yuan and the Industrial and Commercial Bank of China declined 0.25 percent to
4.06 yuan.
Irico Display Devices was the only stock that rose to the daily
limit of ten percent. It gained 0.28 yuan to close at 3.08 yuan as it announced
a net profit estimate of 40 million yuan in the first three
quarters.
Securities shares made gains after heavy loss in the previous two
days. For instance, Pacific Securities was up 7.83 percent to 19.27 yuan and
Citic Securities rose 5.1 percent to 21.86 yuan.
Though the interest rate
cuts should have benefited the real estate industry, property shares only
increase 0.33 percent in overall growth, said analysts. Beijing Urban
Construction Investment & Development Co rose 5.44 percent to 7.36 yuan, but
China Vanke Co dropped 2.15 percent to 6.36 yuan. Poly Real Estate Group Co was
down 3.65 percent to 14.53 yuan.
Despite gains in the Shanghai benchmark
index, total sells still outnumber buys, which shows strong investor prudence,
analysts said.
Yesterday evening, the People's Bank of China (PBOC, central
bank) announced 0.27 percentage points would lower deposit and lending rates
today and the reserve-requirement ratio would be down by 0.5 percentage points
starting Oct. 15.
The cuts, the second such move in less than a month,
highlighted the government's rising concern over the slowing economy and
slumping capital market, analysts said.
Xinhua
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