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Big flotation suspension helps indices rise slightly
( 2003-09-12 09:26) (China Daily)

China's A and B shares closed slightly higher yesterday, with investors learning that a huge share offer from a unit of the Three Gorges Dam project will be postponed to help curb a market slump, brokers said.

The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, nudged up 0.06 per cent to 1,423.96 points. The Shenzhen composite index rose 12.15 points or 0.39 per cent to 3,160.82 yesterday.

Regulators had asked the Yangtze Electric Power Corp to suspend a share offering worth 10 billion yuan (US$1.21 billion) until October as the market was suffering under the weight of recent flotations, market sources said yesterday.

Power firms gained as speculation of the delay helped ease selling pressure, brokers said.

Southeast Power, one of China's largest listed power firms, rose 0.3 per cent to end at 62.9 US cents, making it one of the most active B shares of the day.

The Northwest Electric Development Co Ltd was the top gainer in Shenzhen, surging 5.11 per cent to 3.91 yuan (47.3 US cents).

Analyst Wu Zhaohui of Changjiang Securities said: "The massive Three Gorges flotation is set to batter the market index as it will drain too much money from the market.

"But the suspension is just a short-term boost to investor confidence," he said. "Many investors will stick to the sidelines before the flotation is finally launched."

Trade was slack as investors took a wait-and-see stance. Some even quit trading for the Mid-Autumn Festival, a traditional Chinese holiday celebrated yesterday evening.

Analyst Chen Dong at Minfa Securities said: "The holiday is a good excuse for many investors to escape the bearish market for a while, making today's trade even lighter."

Bank stocks were among the most actively traded counters in the slack market, with Huaxia Bank set to begin trading today.

The Beijing-based bank, which floated shares worth more than 5 billion yuan (US$604 million), will become only the fifth Chinese bank to list on mainland bourses.

China Merchants Bank, the biggest of China's four listed banks, was the third-most active counter in Shanghai, edging up 0.98 per cent to 10.26 yuan (US$1.20).

The Shanghai B-share index rose 0.13 per cent to 99.117 points, while its Shenzhen counterpart finished 0.45 per cent higher at 225.23 points.

Shanghai copper futures ignored falls on the London Metal Exchange to drift higher in a technical rebound yesterday, after posting huge drops a day ago, traders said.

The most active January contract rose 40 yuan (US$4.80) to 18,150 yuan (US$2,193) a ton, while most others gained 30 yuan (US$3.60) to 140 yuan (US$16.90). Combined volume rose to an active 73,498 lots from Wednesday's moderate 55,818 lots.

One Shanghai trader said: "Shanghai copper is making minor adjustments to stabilize at current levels after sharp falls yesterday."

LME three-month copper shed US$19 to US$1,775 a ton by Wednesday's kerb close but recovered to US$1,784/US$1,787 by yesterday's Asian trade on Chinese buying, traders said.

Shanghai's spot copper ended flat to trade in a range of 18,040 to 18,140 yuan (US$2,181 to US$2,194) yesterday.

Almost all Shanghai aluminium futures ended from unchanged to 20 yuan (US$2.40) higher. Combined volume fell to 4,912 lots from Wednesday's active 10,568 lots.

LME aluminium fell to US$1,378, its lowest level since early July, from US$1,391.

China's yuan ended weaker versus the US dollar at 8.2772, at the stronger end of its managed trading range.

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