08.18.08, 4:54 AM ET
BEIJING (XFN-ASIA) - China B-shares closed sharply lower, tracking declines in the A-shares as IPO stock China South Locomotive sucked capital out of a secondary market already suffering from inadequate liquidity, dealers said.
China South Locomotive & Rolling Stock (SHA 601766), the country's largest rail equipment maker, closed up 58.26 pct at 3.45 yuan in its Shanghai debut. The company raised 6.37 bln yuan with a 3 bln A-share offering.
The market also ignored attempts by the securities regulator to provide reassurance.
In a statement issued on the weekend, the China Securities Regulatory Commission expressed concern about volatility in the capital markets, saying it will seek to improve mechanisms that have contributed to recent fluctuations.
Ten stocks, including Huaxin Cement, tumbled by the 10 pct daily limit. Huaxin has fallen about 46 pct this month so far.
The Shanghai B-share Index fell 12.32 points or 7.53 pct to 151.36, while the Shenzhen B-share Index lost 16.62 points or 4.28 pct to 371.43.
'China South Locomotive's debut placed much pressure on liquidity, since its IPO price was very low and attracted some speculation,' said a Shanghai-based analyst who asked not be identified.
'Despite the reassurance from regulators, investor confidence has not been restored,' the analyst added.
In Shanghai, Huaxin Cement (SHB 900933; SHA 600801), Hainan Airlines (SHB 900945; SHA 600221) and Dazhong Transportation (SHB 900903; SHA 600611) all fell 10 pct to 1.233, 0.430 and 0.491 usd, respectively.
Jiangsu Xincheng Real Estate (SHB 900950) was down 10 pct at 0.375 usd. The company reported first-half net profit of 123.29 mln yuan, up 92 pct.
Property firm Shanghai Jiulongshan (SHB 900955; SHA 600555) was the only one stock ending up today. It rose 1.45 pct to 0.558 usd.
In Shenzhen, China Merchants Property Development (SZB 200024; SZA 000024) fell 4.88 pct to 8.38 hkd, while China Vanke (SZB 200002; SZA 000002), the country's top property developer by market value, slipped 9.21 pct to 7.00 hkd.
Hainan Pearl River Holdings (SZB 200505; SZA 000505) slid 9.33 pct to 2.04 hkd. The property firm reported a net loss of 46.51 mln yuan in the first half.
Shandong Airlines (SZB 200152) was down 6.15 pct at 2.90 hkd.
The FTSE/Xinhua China B 35 Index was down 332.72 points or 5.68 pct at 5,521.60.
The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 130.74 points or 5.34 pct at 2,319.87.
(1 usd = 6.8 yuan; 7.8 hkd)
allen.shu@xfn.com
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xfnals/xfntm
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