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Shares drop as Ping An offer looms large, 02/09

(Xinhua)
Updated: 2007-02-12 10:40

Shares in Shanghai dipped slightly last on the back of a three-day increase.

The slip was largely driven by investor concern over short-term liquidity pressure amid the initial public offering (IPO) by Ping An Insurance (Group) Co.

The benchmark Shanghai Composite Index, which covers both A and B shares listed on the Shanghai Stock Exchange, closed down 7.35 points, or 0.27 percent, at 2,730.39.

Turnover fell to 62.97 billion yuan (US$8.07 billion) from 69.60 billion on Thursday.

Subscriptions for Ping An's IPO of yuan-denominated Shanghai shares, expected to raise up to 38.87 billion yuan, opened Friday and close on Monday.

The IPO is expected to attract as much as 900 billion yuan in subscriptions.

Blue chips, such as banks, dropped yesterday.

China Petroleum & Chemical was down 2.7 percent at 8.37 yuan.

China Merchants Bank fell 3.1 percent to 16.05 yuan, and Bank of China dropped 1.3 percent to 4.54 yuan. Baoshan Iron & Steel lost 3.9 percent to 8.21 yuan, and China Unicom was down 1.09 percent to 4.55 yuan.

China shares will consolidate around present levels in thin trading next week, as investors move to the sidelines ahead of a week of Lunar New Year festivities starting next Sunday, according to Tiantong Securities.

And GF Securities has warned investors to be wary of stocks in finance, real estate, petrochemicals and steel in the near term. Instead, they should seek opportunities in second-tier shares.

Aerospace and power-generator chips are the most active shares in the market, according to many analysts, who expect the index to fluctuate between 2,600 and 2,800.