China stocks mixed on new share sales

AP News
Posted: Dec 25, 2009 10:48 AM

Chinese stocks ended mixed Friday on concerns about new share sales that drained market liquidity.

The benchmark Shanghai Composite Index slipped 12.06 points, or 0.4 percent, to close at 3,141.35, ending the week up by 0.9 percent. The Shenzhen Composite Index for China's second exchange edged up 0.2 percent to 1,168.17.

A brief two-day rally fizzled as investors were worried about a string of initial public offerings that will divert capital from existing equities, analysts said.

Eight companies were listed Friday on China's new board for smaller shares.

"The regulators didn't slow down the pace for issuing new shares, while the market is facing a lot of pressure on capital drain at the end of the year," said Zhou Yu, an analyst for Pacific Securities in Beijing.

Market capital flow usually falls short in December, when companies are closing their books.

Nonferrous metals retreated after strong performances in the previous session, with Jiangxi Copper Ltd., the country's biggest metal producer, off 1.6 percent to 37.98 yuan, and Aluminum Corp. of China down 1.1 percent to 14.09 yuan.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, declined by 0.4 percent to 5.14 yuan. Bank of China Ltd. lost 1 percent to 4.12 yuan, while China Construction Bank Ltd. shed 0.5 percent to 5.82 yuan.

Medical shares jumped after the commerce minister, Chen Deming, said Thursday that the government will encourage more foreign investment in the industry next year.

Zhejiang CONBA Pharmaceutical Co., an herbal medicine maker, surged 6.9 percent to 11.75 yuan, while Kunming Pharmaceutical Corp. gained 4.3 percent to 10.97 yuan.

In currency markets, the yuan leveled with Thursday's close at 6.8276.