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Shenzhen B-shares extended losses on Tuesday as the
government's growing clampdown on stock manipulation is casting a
shadow over much-needed market reform measures.
The Shenzhen B-share Index plunged 2.32 points or 1.75% to its
session low of 130.05 points Tuesday morning, on a turnover of
HK$17.82 million (RMB18.89 million), which was less than 40% of
Monday's total of HK$46.08 million.
The China Securities Regulatory Commission, or CSRC, today
published new guidelines in the Securities Times newspaper,
specifying how brokerages should run their businesses. Guidelines
include setting up "firewalls" between corporate finance
departments and traders, and rules banning traders from using
clients' funds for their own transactions.
In the meantime, state regulators are currently investigating
allegations that China Venture Capital Group Co., Ltd. (0048.SZ),
a Shenzhen-based poultry company, has been engaged in share price
manipulation. Brokerages are alleged to have also played a crucial
role in the case by providing loan guarantees used by company
officials to raise the large sums of capital required to
manipulate the price of shares.
Yesterday, China's securities regulator issued a detailed
timetable to revise and standardize the information disclosure
system of the stock market.
Worries about the crackdown already have hurt market sentiment,
potentially slowing a raft of planned share offerings this year.
And investigations into past price manipulation are turning an
unwelcome spotlight on some of the country's leading brokerage
firms, which could slow their ambitious plans to expand and link
with foreign institutions.
Declining shares led advancing issues 48 to five with six
unchanged.
Shenzhen Shenbao Industrial Co., Ltd. (2019.SZ) rose 9.30% to
HK$3.76, while Shenzhen Properties & Resources Development
Co., Ltd. (2011.SZ) added 1.80% to HK$2.26.
Shenzhen Huafa Electronics Co., Ltd. (2020.SZ) fell 5.02% to
HK$2.65, while Shandong Airlines Co., Ltd. (2152.SZ) lost 4.51% to
HK$2.54.
Market outlook: The Shenzhen B-share market will continue to
register further losses since the crackdown has dimmed investors'
confidence.
www.chinaweb.com
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