SHANGHAI Bank news pushes prices up

China's shares closed 2 per cent higher yesterday, buoyed by solid gains in bank stocks on news that China's big four State-owned commercial banks could issue nearly US$36 billion in subordinated bonds to boost their capital base.

The benchmark Shanghai composite index, grouping hard currency B-shares and yuan-denominated A-shares, rose 2.18 per cent to 1,685.159 points.

Shenzhen's sub-index increased by 1.81 per cent to finish at 3,866.90 points.

Shanghai's B-share index rose by 2.26 per cent to 119.210 while Shenzhen's climbed by 1.94 per cent to 300.22.

Confirmed and suspected outbreaks of deadly bird flu in 12 of China's provinces, regions and major cities were largely ignored as investors clung to the belief that the disease was not highly contagious among humans, analysts said.

Three of China's five listed lenders topped the list of the day's most active counters. Brokers said buying interest in banks has been strong after the country's cabinet gave a rare pledge to overhaul the capital markets on Monday.

China's sole private lender, Minsheng Banking Corp, jumped 3.19 per cent to 11.98 yuan (US$1.45).

HONG KONG

Bird flu fears yield caution

Hong Kong shares ended flat yesterday as investors remained wary of bird flu in the absence of new market leads.

The Hang Seng Index slipped 3.28 points, or 0.03 per cent, to 13,086.73. On Tuesday, the index snapped a four-session losing streak and rose 90.03 points, or 0.69 per cent.

Turnover dropped to US$15.74 billion (US$2.02 billion) from Tuesday's HK$19.40 billion (US$2.49 billion).

Bird flu's rapid spread throughout Asia has weighed down regional financial markets. The disease has devastated the chicken population in many countries, crossing over and killing 14 people in Thailand and Vietnam combined.

SINGAPORE

Stocks feel pressure

Singapore shares ended lower yesterday for the second consecutive session, weighed down by selling in heavyweight bank stocks DBS Group Holdings and United Overseas Bank, traders said.

They said investors cashed out of the two banks on concerns that their prices had risen too high.

The Straits Times Index closed down 10.49 points, or 0.6 per cent, at 1,834.64, with an intraday low of 1,830.05.

Decliners outnumbered advancers 193 to 124 while 240 stocks remained unchanged or untraded.

Volume slipped further to 931.2 million shares from 934.4 million shares on Tuesday.

The February MSCI Singapore futures contract ended at 223.1 points, down 1.8 points, on 3,518 contracts traded.

TOKYO

Nikkei down 1.83 per cent

Tokyo stocks lost nearly 2 per cent yesterday as flighty investors drove down bank and technology shares in a jittery market. The US dollar was slightly down against the Japanese yen.

The Nikkei Stock Average of 225 issues closed down 194.67 points, or 1.83 per cent, at 10,447.25 points. On Tuesday, the index lost 134.81 points, or 1.25 per cent.

Prices plunged as speculators unloaded bank shares because of ongoing concerns about their bad loans and how they might affect the banks' financial health.

"The authorities are carrying on their special inspections of banks and traders are recalling the financial scares of years past," said Katsuhiko Hiroshige, managing director of the investment advisory firm Traders & Co.

NEW YORK

Stocks mixed in seesaw trading

Stocks stalled for a second straight session on Tuesday, this time because of renewed terrorism fears after the discovery of the toxic powder ricin forced the closure of all Senate buildings.

With few buyers and sellers in the market, trading was volatile and the major indexes alternated between gains and losses, ending the day fractionally higher. The absence of broad-based selling led most traders to believe there had been only a limited reaction to the ricin concerns.

"I don't think you can really attribute the choppiness to that," said Brian Williamson, an equity trader at The Boston Company Asset Management. "I think there aren't a lot of stories out there in general about the economy and stocks themselves, so that slows things down a little bit."

The Dow Jones industrial average ended the day up 6.00, or 0.1 per cent, at 10,505.18.

(China Daily 02/05/2004 page11)