Shanghai shares drop led by lenders | Shanghai Daily

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Shanghai shares drop led by lenders

SHANGHAI'S key stock index ended lower in the morning session, led by lenders after a regulatory official said banks may raise 500 billion yuan from the stock market next year.

The benchmark Shanghai Composite Index dipped 0.62 percent, or 19.3 points, to close at 3,094.59 points. Turnover stood at 47.6 billion yuan (US$7 billion). Losers outnumbered gainers 443 to 400 and 35 stocks remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 0.14 percent to close at 1,126.31 points.

"Based on estimated lending growth next year, banks will face great challenges in capital adequacy ratios. Issuing shares is the best way to replenish capital," said Li Fu'an, director general of Innovation Supervision Coordination Department at the China Banking Regulatory Commission at a forum over the weekend.

Li estimated that banks have to raise up to 500 billion yuan in order to boost capital for more lending after taking into consideration the proposed initial public offering by Agricultural Bank of China.

China Merchants Bank Co withdrew 2.8 percent to 16.7 yuan while Huaxia Bank Co, partly owned by Deutsche Bank AG, tumbled 4.2 percent to 11.51 yuan. Industrial and Commercial Bank of China Ltd was off 0.2 percent to 5.12 yuan.

Bank of Nanjing lost 2.9 percent to 18.41 yuan after saying it plans to raise as much as 5 billion yuan in a rights offer to replenish capital.

Bucking the downward trend, brokerages gained after Shang Fulin, chairman of the China Securities Regulatory Commission, said the regulator will launch index futures and margn trading at an appropriate time.

Haitong Securities Co, the nation's second-biggest brokerage, jumped 1.7 percent to 17.59 yuan. Sinolink Securities Co added 1.4 percent to 23.38 yuan. CITIC Securities Co gained 1.1 percent to 28.85 yuan.



 

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