China blue chips post worst day in 2 months

Business Monday 27/February/2017 17:27 PM
By: Times News Service
China blue chips post worst day in 2 months

Shanghai: China's blue chips posted their biggest single-day loss in two months on Monday after the securities regulator vowed to step up its campaign against speculation and hinted about loosening its grip on new share offerings.
The blue-chip CSI300 index fell 0.8 percent to 3,446.22 points, its sharpest drop since December 23, while the Shanghai Composite Index also weakened 0.8 percent to 3,228.66 points.
Liu Shiyu, chairman of the China Securities Regulatory Commission (CSRC), told a news conference on Sunday that the country will focus on stable development of its capital markets this year.
But limiting or halting initial share sales in order to stabilise the secondary market doesn't "solve the problems of long-term healthy development of capital markets," Liu added, stirring worries of increasing equity supply this year.
The remarks followed a regulator's move over the weekend to punish the insurance unit of financial conglomerate Baoneng Group for speculative trading, and a 3.48 billion yuan ($506.96) penalty on investor Xian Yan for market misbehaviour.
"This shows that regulators are taking a tough stance against speculative trading," wrote Li Lifeng, analyst at Sinolink Securities.
"This will purify China's share market, but will have a negative impact on those stocks with excessive valuations."
Baoneng Group's listed units, including Nanning Department Store, CSG Holding and Jonjee Hi-tech Industrial and Commercial Holding tanked in response to the regulator's moves.
Main sectors fell across the board, led by transport shares .
Baowu Iron & Steel, previously known as Baoshan Iron & Steel, shot up 7.4 per cent following a one-month trading halt after its acquisition of smaller debt-laden rival Wuhan Iron and Steel.