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China's A and B shares ended higher yesterday, buoyed by speculation in telecommunications and technology counters as punters bet that foreign institutional investors might favour such firms, brokers said.
The benchmark Shanghai composite index, grouping A and B shares, closed up 16.345 points or 1.05 percent at 1,568.156 points. The Shenzhen sub-index also gained 49.36 points or 1.43 percent to close at 3,489.88.
Shanghai's B-share index rose 1.21 percent to 119.043 points while Shenzhen's edged up 0.15 percent to 223.39 points.
Analyst Zhang Jun of Shanghai Securities said: "Chinese punters are hoping to build positions in telecom and tech counters before the foreign investors start trading."
China's securities regulator has allowed UBS AG and Japan's Nomura Securities to trade previously off-limits A shares once they get investment quotas from the State Administration of Foreign Exchange.
Telecom gear maker Eastern Communications Co led B shares in gains and volume in Shanghai, rising 3.74 percent to 63.8 US cents with 1.4 million shares changing hands.
UBS Warburg, a unit of UBS AG, was one of the first to gain approval to trade yuan-denominated A shares and bonds. It had "buy" recommendations in March on just two A shares - a freight airline and a telecom gear maker.
Shanghai Post & Telecommunications was among the best Shanghai B-share performers with a 2.22 percent rise to 69.2 US cents.
Also outperforming were shares in technology firms. Investors snapped up tech counters after the United States' NASDAQ composite index closed at its highest in nearly a year, analysts said.
Soyea Technology Co, a digital audiovisual product maker, was the top A-share gainer in Shenzhen with a rise of 10 percent, its daily limit, to 9.02 yuan (US$1.08).
Bucking the trend were the shares in car makers, hit by profit-taking after a recent rally, analysts said.
China's largest minivan maker Chang'an Automobile Co slid 1.1 percent to HK$6.95 (89 US cents).
China's yuan ended flat at 8.2770 against the US dollar yesterday, remaining at the high end of a government-set trading range as hard-currency supply on the market was ample, dealers said.
The yuan moved narrowly between 8.2769 and 8.2771, near the firm end of a tiny range of 8.2760 to 8.2800 set by the central People's Bank of China.
Turnover was moderate at US$510 million, although that was up from US$380 million on Wednesday.
A Chinese bank dealer said: "China's healthy trade surplus over the past few years has ensured a steady hard-currency inflow to the market, and strong dollar supply is likely to continue to keep the yuan at high levels around 8.2770."
The yuan firmed to 6.9591 per 100 Japanese yen from 7.0568 and strengthened against the euro to 9.7200 from 9.7919, but it closed two notches weaker against the Hong Kong dollar at 1.0611.
Shanghai copper futures closed down yesterday as investors' sentiment weakened after a steep fall on the London Metal Exchange, traders said.
Shanghai's most active October 2003 futures fell 140 yuan (US$16.80) to 17,330 yuan (US$2,094) a ton. Almost all other contracts ended 120 yuan (US$14.40) to 160 yuan (US$19.20) lower. Combined market volume fell to 53,068 lots from Wednesday's moderate 68,672 lots.
LME three-month copper closed Wednesday's kerb at US$1,693, a US$22 loss.
A Chinese trader based in Shanghai said: "A close below the psychologically important US$1,700 level on the LME, hit by profit-taking after a recent rally, weakened domestic market sentiment."
He added: "Abundant copper imports also pressured prices."
(China Daily May 30, 2003)
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