HONG KONG (June 19): China shares had their biggest daily losses in more than seven weeks on Thursday, as the diversion of a sizable amount of capital for initial public offerings continued to weigh on markets.
The Shanghai Composite Index slid 1.6 percent at 2,023.73 points, its biggest daily loss since April 28. The CSI300 of the leading Shanghai and Shenzhen A-share listings lost 1.5 percent, its worst day since April 21. Both fell for a third day in a row.
Five companies from the first batch to pursue listings after a four-month lull are taking subscriptions. Relatively low price-earnings ratios are attracting money from existing stocks.
Investors keen on coming IPOs have turned to little-known overnight pledged bond repurchase agreements for funds – driving up the cost of borrowing nearly four-fold.
Brokerage firms were weaker, with CITIC Securities down 2 percent. Sinolink Securities and Founder Securities shed 4.4 and 3.3 percent, respectively.
Chinese nickel companies were hard hit on Thursday, as prices for the base metal slid 2 percent with stockpile on the London Metal Exchange surging to a high.
Jilin Ji En Nickel Industry slumped the maximum allowed 10 percent. – Reuters
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