By Li Zengxin (www.ming7.cn)
Updated: 2007-08-07 16:48

Affected by the slumping American stock market last Friday, Asian markets including Hong Kong, Japan and Singapore dropped over 1 percent yesterday. According to industrial statistics, a total US$2.66 trillion has evaporated from the global stock markets since late July due to the mortgage loan crisis on the secondary market in the United States.

The loss is close to the "February 27" world stock market plunge, which also dragged down Chinese A shares. But this time, the mainland stocks were unaffected.

The domestic stock market experienced growth for the fourth consecutive day today. As the indices kept breaking records, the total market value of securities listed on the two exchanges reached 20.68 trillion yuan, close to China's 2006 gross domestic product of 20.94 trillion yuan. Meanwhile China State Shipbuilding became the first mainland stock to reach 200 yuan per share yesterday.

The current round of growth may be justified by the rapid growth in earnings of listed companies, some analysts said. By this Monday, 271 companies, or 19 percent of the total public companies, revealed their half-year results - a total net profit of 24.18 billion yuan including investment return of 5.23 billion yuan. The weighted average earnings per share of the companies reached 0.2183 yuan, up 44 percent over the same period last year; earnings to net asset was 7.69 percent, up 37 percent.

Of the companies, 256 had positive net profits in the first half, accounting for 94.5 percent of the total. China Yangtze Power ranked on top with a 2.26 billion yuan net profit, followed by Haitong Securities with 2.04 billion yuan. Another seven companies had their profit grow over 10 times in the first six months, led by Liaoning Hongyang Energy Resource Invest, seeing its profit rising 5,131 percent.

Profit of the companies in the real estate, construction, machinery and petrochemicals grew fastest in the first half, while the banking, insurance, metal and non-ferrous metal, power supply, food and beverage and mining sectors earned the most in absolute terms.

These companies also gained from the bull stock market. It is worth noting the 5.23 billion yuan investment return, accounting for 21.6 percent of the total net profit, suggests one fifth of the net profits of these companies may have come from gains in the share prices.

The strong performance of the market also attracted more fund-raisers and investors. The pace for initial public offerings (IPOs) has sped up and the small- and medium-sized enterprise (SME) board in Shenzhen is becoming a top destination for smaller companies. In the past three weeks, seven new stocks per week were added to the trading board on average.

Last week, there were eight IPOs on the SME board, freezing a total of 2 trillion yuan in the form of share subscriptions, close to the record-setting amounts for IPOs including Bank of Nanjing and Bank of Jiangsu last month.

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