Shanghai A-shares close slightly higher; B-shares higher despite profit-taking

SHANGHAI (AFX-ASIA) - A-share prices closed slightly higher in directionless trade as attention continued to focus on the B-share market, dealers said. B-share prices closed sharply higher, having rebounded from flat towards the end of the first session, they said, adding that B-shares were under heavy pressure from profit-taking after charting maximum gains for four consecutive trading days and opening near their upper limit again this morning. The A-share index gained 4.45 points or 0.21 pct to 2,091.95 on turnover of 7.46 bln yuan after trading between 2,091.95 and 2,078.28. The B-share index closed 6.14 points or 5.06 pct higher at 127.47 after trading between 132.84 and 121.90. The composite A- and B-share index closed 5.86 points or 0.29 pct higher at 1,990.06 on turnover of 14.42 bln yuan after trading to a high of 1,987.02 and a low of 1,977.11. The SSE-30 index gained 16.85 points to 3,849.03. In the previous four trading days, B-share prices traded to their upper daily limit amid strong buyer demand following the implementation of a policy giving domestic individuals formal access to the market. However, heavy turnover both yesterday and today indicated that many existing B-share holders are beginning to take profits amid the belief that share prices are peaking, they said. There were also rumours that the Shanghai Stock Exchange is requiring several key domestic institutions to trim their positions in order to enable domestic retail investors access to the market. Although some domestic analysts said foreign institutions may be responsible for the heavy B-share selling, foreign dealers said foreign institutions were carrying out only limited amounts of both selling and buying, while domestic investors continued to account for the bulk of B-share trade. Poor quality and loss-making B-share companies were among the most actively traded as heavy selling met with strong buying by domestic individual investors, they said. more

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