Business / Markets

Mainland stock exchanges plummet

By Gao Changxin in Shanghai (China Daily) Updated: 2012-06-05 11:22

Stocks see biggest drop in 6 months as investors get jittery over international board

Mainland equities plummeted on Monday, posting their biggest drop in six months, as investors worried that the advent of an international board could siphon A-share liquidity, and data pointed to slower non-manufacturing expansion.

China International Capital Corp, the nation's biggest investment bank, expects equities to remain roughly stable this month, with the Shanghai Composite Index fluctuating between 2,300 and 2,500 points.

The index fell 64.89 points, or 2.7 percent, to 2,308.55 points, its biggest drop since Nov 30. The daily trading volume was 86.90 billion yuan ($13.65 billion), more than 10 percent higher than this year's average so far.

The CSI 300 Index, which tracks bigger companies, fell deeper, retreating 2.8 percent to 2,559.03 points.

The launch of an international board, which would allow foreign companies to list on the mainland stock market, returned to the agenda after a central government document said the country should allow overseas institutions to issue shares. The document, jointly signed by eight ministries, spooked investors at a time when capital is continuing to flow out of the stock market, with the figure reaching 65.6 billion yuan in May.

Liu Jipeng, a professor of capital markets at China University of Political Science and Law, said that an international board was unlikely to be established in the near future.

"Judging from the domestic and foreign (economic) environment, now is not the appropriate time to launch the board," he said.

The Securities Times on Monday quoted a China Securities Regulatory Commission official as saying that there was no timetable for the establishment of the board.

PetroChina Co declined 1.7 percent to a record low of 9.30 yuan after Shanghai Securities News said gas and diesel prices might be cut by about 700 yuan per metric ton, citing the website

China Petroleum & Chemical Corp, the nation's other oil giant, fell 3.1 percent to 6.49 yuan.

Industrial and Commercial Bank of China Ltd, the second-biggest A-share company in terms of market capitalization, dropped 1.65 percent, or 0.07 yuan, to 4.17 yuan. The drop comes amid reports saying banking regulators ordered the nation's five biggest lenders to review their outstanding loans, totaling 28 trillion yuan.

China Construction Bank Corp, the nation's second-biggest bank in terms of assets, lost 1.11 percent, falling to 4.44 yuan.

The National Bureau of Statistics said on Sunday that the non-manufacturing purchasing manager's index dropped to 55.2 in May from 56.1 last month.

Hot Topics

Editor's Picks