Shanghai shares/morning close -- 2 (further gains seen on govt support)

Chen Shuohong, assistant director of Ping'an Securities' research centre, said the CSRC was clearly trying to minimise the negative impact of investigations into share price manipulation by the 10 fund management companies.	    Consequently, the commission released the news of the investigations alongside market-boosting news about the impending launch of open-ended securities funds, he said.	    "From this you can tell the CSRC's attitude, which represents the government's attitude. The government does not want the market to undergo a major correction. It doesn't want the market hurt by any negative news," he said.	    Chen said he believes the government is prepared to allow institutions to carry out a certain amount of illegal transactions, and will only try to improve supervision gradually as the market develops.	    The government needs to ensure that the market remains active, and prices remain high, in order to channel money to state enterprises and social security funds, he said.	    While the government has in the past focused on using the market to raise funds for state firms, Chen said he believes the market's role as a source of funds for social security will become increasingly important to the government.	    "The government needs to be able to float state shares in order to raise funds for social security. How will it be able to do this if the market isn't stable?" he said,	    "Given this background, it's not strange that the government should be committing funds to protect the market," he said, referring to recent rumours that a government injection of funds has been behind the recent strong gains in index-weighted shares.	    Chen said he expects confidence in government support for the market to drive A-share prices to record highs in the near future.	    Chen also noted that the government has not taken any action to calm the speculative mood in the B-share market, adding that this also appears to be a sign that the government is keen to ensure that the market remains active.	    Shanghai Automotive gained 0.22 yuan to 13.16 on 6.4 mln shares, while Dongfeng Automobile rose 0.04 yuan to 9.24 on 4.6 mln shares.	    Datang Telecommunications gained 1.23 yuan to 28.42 on 3.8 mln shares, while Shanghai Posts and Telecommunications rose 1.31 yuan to 21.66 on 996,000 shares and Unicom Guomai gained 0.69 yuan to 23.79 on 880,000 shares.	    Baotou Steel Union shed 0.01 yuan to 6.65 on Maanshan Iron & Steel dropped 0.03 yuan to 4.12 on 2.1 mln shares.	    Among B-shares, Shanghai Chlor-Alkali gained 0.006 usd to 0.603 on 17.2 mln shares, while Shanghai Tyre & Rubber rose 0.003 usd to 0.675 on 14.2 mln shares and Shanghai Erfangji gained 0.013 usd to 0.566 on 11.6 mln shares.	    Heilongjiang Electric Power gained 0.08 usd to 1.29 on 12.1 mln shares. 

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