Shanghai shares close flat

Shanghai stocks closed generally flat today after a decline by recently-listed companies offset gains made by consumer shares after the securities regulator warned of risks and bubbles.

The Shanghai Composite Index dipped 0.01 percent to end at 3,291.11 points, dragged by “sub-new shares,” referring to firms listed within one year and haven’t issued dividends, after the China Securities Regulatory Commission on Wednesday yesterday warned of risks in these firms where speculation is rife.

The CSRC said such stocks have been chased by speculative funds due to relatively low price earning ratio – which means they are cheaper – and low liquidity after the regulator fined a company a record US$820 million for manipulating share prices of such firms.

Recently listed shares Xuancheng Valin Precision Technology Co tumbled 8.70 percent to 25.09 yuan (US$3.97) and Nacity Property Service Co fell 5.11 percent to 41.22 yuan, “offsetting rises in consumer firms today,” said Zhou Jianbing, chief analyst at Sinolink Securities.

Meanwhile, consumer goods producers such as Shanxi Xinghuacun Fen Wine Factory Co gained 5.02 yuan to 58.60 yuan while ShangHai JinFeng Wine Co added 4.15 percent to 8.28 yuan.