Shanghai B-shares higher on institutional support/overseas impact limited

SHANGHAI (AFX-ASIA) - B-share prices were higher in late morning trade, after rebounding off their lows, as support from domestic institutions offset pressure from profit-taking, dealers said.	    While trading was volatile -- with prices opening higher, before dropping sharply and then rebounding equally sharply -- the negative impact of declines on international markets was limited since domestic investors now account for the bulk of B-share trade, they said.	    At 11:04 am, the B-share index was up 1.38 points at 139.59, while the A-share index was up 7.55 points at 2,188.99.	    Qinghai Securities analyst Tang Gu said there are clear signs that some institutions are seeking to drive B-share prices higher in order to offset sustained selling pressure.	    The market's small capitalisation makes it relatively cheap for institutions to generate sharp index gains.	    "If institutions didn't push prices higher, how would they persuade people to carry out follow-through buying. This is standard practice in the A-share market and now the institutions are using it on the B-share market too," Tang said.	    Tang said the trading pattern on the B-share market has increasingly come to resemble that of the A-share market following the launch of a policy giving domestic individuals the formal right to trade B-shares.	    Great Eagle Securities analyst Ma Jian said B-shares were little affected by disappointment over the U.S. Federal Reserve's decision to cut interest rates by only 50 basis points, less than the 75 basis points many investors had hoped for.	    "Since there are not many foreign investors in the B-share market the situation in the U.S. bears little relation to the situation on the Chinese market," he said.

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