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Stocks bounce back after plunging deep

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-06-05 15:38

Special coverage:
Markets Watch  

Related readings:
 Stocks keep plunging deep in morning session
 titlStock market sees biggest single-day slump in 10 years
 Index dives 109 points, nearly losing 4,000 battleground, 06/01
 Stocks come back after 'breath-taking' plunge

B shares returned. Of the 109 B shares listed on the two exchanges, 91 rose, six ended flat and 12 closed down. Shenzhen Victor Onward Textile Industrial climbed 10.09 percent to 4.91 as the top gainer. Funds also made a U-turn after hitting the bottom.

By June 1, there had been 102,264,100 investment accounts in the domestic stock market, including 88,459,700 A-share, 2,180,800 B-share and 11,623,600 fund accounts.

Although today's coming-back may appease the "panic" selling tides in the market and investors may now take a break. But it is far from fully recovering from the loss for the past days.

The stock market capitalization has decreased 17 percent within just four trading days by yesterday since last Wednesday when the stamp tax was raised at mid night to 0.3 percent.

Total market value of the two stock exchanges was 15,793.3 billion yuan by yesterday's closing, down 1,421.6 billion yuan or 8.25 percent from last Friday.

The total market value by May 29 - the day before the tax change - was 19,023.5 billion yuan. The recent plunges in share prices have erased 3,230.2 billion yuan from the stock market. Total market value of the stock markets was 17 percent less in just four trading days.

The continuous drop also damaged investor confidence. The new A-share account opening last Friday was 227,000, the smallest amount for more than a month. Total account opening was 418,800 at the two stock exchanges, including 3,734 B-share and 188,000 fund accounts for that day, according to China Depository and Clearing Co Ltd.

In contrast, the floating capital increased 36 billion yuan to 1.016 trillion yuan in the stock market last month, compared with April. There were 5.6 million new stock accounts opened last month.

From May 8 to May 31, capital outflow from initial public offerings (IPOs) was 640 million yuan while stamp tax and commission charges drained 34 billion yuan from the market. Capital inflow was seen at 70.6 billion yuan. Net capital inflow was 35.96 billion yuan.

To expand capital outflow channels, the China Securities Regulatory Commission (CSRC) approved four new funds yesterday, according to sources close to the matter. The fund managers, Invesco Great Wall Fund Management, Yimin Asset Management, GF Fund Management and Fortune SGAM Fund Management will issue stock investment-oriented fund products soon. Invesco Great Wall's blue-chip funds will be released next week.

The IPO committee of CSRC also approved the listing of COSCO Holdings yesterday. The container shipment, port, container leasing and logistic business operator will issue no more than 1.784 billion A shares.


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(For more biz stories, please visit Industry Updates)



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