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CSRC releases new M&A rule

By Fei Ya (China Daily)
Updated: 2006-08-03 08:44

But the announcement did not bring about a recovery in yesterday's sluggish stock market.

China's stock market closed flat yesterday. The benchmark Shanghai composite index ended at 1600.87 points after recovering from a 1.05 per cent drop in the morning session. Turnover in Shanghai A shares was a thin 15 billion yuan (US$1.88 billion), down from Tuesday's 17.8 billion (US$2.23 billion).

"The market continued a downward trend in the morning due to the pressure formed by a slew of new initial public offerings (IPOs), but blue chips including Sinopec and Bank of China started to climb after days of slump, and this led the market to finally end flat," said Yu Jun, an analyst with CITIC Securities.

Sinopec rose 1.22 per cent to close at 5.81 yuan (72.6 US cents) on yesterday's market. And Bank of China rose 0.90 per cent to close at 3.35 yuan (41.9 US cents).

"Generally speaking, investors demonstrated a hesitant attitude to the market because the prospects are somehow unclear as the market's ability to absorb new listings may be fading for the short term," Yu said.

Shares in the newly listed Daqin Railway Co Ltd rose 3.8 per cent to end at 5.73 yuan (71.6 US cents). But their performance during their first trading day was far more muted than expected. Some traders had hoped the shares would double from their IPO price of 4.95 yuan (61.9 US cents).

"It is good news for Daqin Railway to have a rise on yesterday's market. Investors are not as interested as they were before when a new IPO comes on the market," Yu said.

"On the other hand, the company is near to concluding a period of fast growth; unless it has new mergers and acquisitions to trigger a new growth cycle, investors will not have strong interest in it," the analyst said.

China Vanke , the nation's biggest publicly traded property developer, yesterday rose 0.53 per cent to close at 5.64 yuan (71 US cents) after the company said its first-half profit jumped 59 per cent as higher incomes and economic growth drove up demand for apartments and offices.