Shanghai B-shares -- 2 (rumours Shanghai bourse orders institutional selling)

One analyst at a domestic securities firm said existing B-share investors have accumulated large space for profit-taking, after four days of maximum B-share gains. However, there are also rumours that the Shanghai Stock Exchange is requiring some domestic securities firms to trim their B-share positions in order to allow retail investors to buy shares. The analyst, who asked not to be identified, said there are rumours thatthe stock exchange recently held a meeting with senior representatives of domestic securities firms, at which Shenyin and Wanguo Securities, Guotai Junan Securities and Haitong Securities were, in particular, asked to sell some of their B-share holdings. Between them, these three companies are believed to hold more than half of all B-shares, he said. "Since these companies bought their shares when the index was at an average of about 70-80 points, their gains are already huge," he said, noting that many poor quality B-shares are encountering heavy selling today. On the other hand, existing B-share holders generally remain unwilling to sell their shares in good quality companies, he said.

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