Business / Markets

Stocks dip, foreign investment slows

By Gao Changxin in Shanghai (China Daily) Updated: 2014-06-18 07:11

In the first five months of the year, the country attracted $49 billion in foreign direct investment, up 2.8 percent from a year earlier. But it was the weakest showing in a year, reflecting forecasts that China's economic growth this year might slide to its slowest in two decades.

Local media reported on Tuesday that at least 18 banks were involved in the Port of Qiangdao scandal, in which commodity traders allegedly used warehouse receipts fraudulently to get bank loans. Banking shares lost an average of 0.99 percent on Tuesday.

Sinopec and PetroChina, two of China's biggest oil companies, both lost over 0.5 percent in Shanghai.

Four companies are scheduled to issue shares on Wednesday in Shanghai and Shenzhen after the China Securities Regulatory Commission readjusted listing rules. Typically, new issuances put pressure on the market as funds are siphoned from existing shares.

But that might well be offset by the central bank's recent easing operations. Four commercial banks, Minsheng Bank, China Merchants Bank, Industrial Bank and Bank of Ningbo, confirmed on Monday that they have received permission from the People's Bank of China to be included in the latest targeted reserve requirement ratio cuts.

The first three national lenders have about 7 trillion in deposits, suggesting a 35 billion yuan liquidity injection for a 50 basis point cut, according to Barclays Plc.

Altogether, the April and June reserve ratio cuts amount to a 200 billion yuan liquidity injection, according to the British bank.

In its report, the Bank of China said that all the irregularities pointed out by the National Audit Office have been fixed, and the report won't affect the bank's overall operating performance or past financial statements.

Stocks dip, foreign investment slows

Stocks dip, foreign investment slows
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