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Stock index edges up

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-05-25 16:17

Financial shares led the growth again, with industrial index rising 5.79 percent. Shenzhen Development Bank surged 4.99 percent to 29.24 yuan, followed by Shanghai Pudong Development Bank as the top gainers among banking shares. Besides CITIC Securities, Hongyuan Securities also saw a price hike of 6.68 percent to 40.30 yuan. Companies in the hotel and catering services industry were also among the best performers.

B-shares stopped the continuous fall for the last three days, with the Shanghai Composite B-share Index ending 8.75 percent up and the Shenzhen Component B-share Index up 0.59 percent. Of the 109 B-shares, only three went down today. Nanjing Postal Telecommunications ranked on top of the gainers with a 10.08 rise in share price.

According to data from the China Securities Depository and Clearing Co Ltd, by May 23, the total account number (including A-share, B-share and fund accounts) in the two exchanges reached 99.08 million, up 26.16 percent from the end of last year. It is expected to breach the 100-million mark by next Tuesday, if the growth rate of new account opening were maintained at a daily record of 300,000, as it has been so far this month.

By Wednesday, the total number of A-share accounts has exceeded 86.24 million, 13.18 million of which was added up in the first five months this year. There were also 483,500 new B-share accounts this year.

New Stock Account Opening Numbers in May

Date	A-share	B-Share	Fund	Total
2007-05-08	368,489	16,632	36,710	421,831
2007-05-09	325,969	27,764	198,826	552,559
2007-05-10	333,963	35,133	194,143	563,239
2007-05-11	335,278	38,815	362,940	737,033
2007-05-14	346,892	44,777	108,179	499,848
2007-05-15	299,762	56,570	47,037	403,369
2007-05-16	240,023	44,668	42,328	327,019
2007-05-17	232,257	33,693	27,836	293,786
2007-05-18	252,364	35,066	23,009	310,439
2007-05-21	286,995	27,952	37,185	352,132
2007-05-22	286,392	20,627	34,334	341,353
2007-05-23	297,757	14,860	37,245	349,862

As the stocks have stood still over the 4,000 point and started accumulating strength for further growth, volatility in the market also grew. To avoid loss from payment default by borrowers, several commercial banks had a sudden brake on loan business with share pledge.

Once regarded as a needed outlet for excessive liquidity and a lucrative business for banks, now the lending on collateral of stocks became "dispensable" and too risky for banks. More maturing small loan contracts were not extended. And some one-year term loans with share pledge were withdrawn before maturity, even with an annual interest rate as high as 10 percent, according to a source with a commercial bank.

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