Shanghai shares/close -- 2 (punishment for share manipulators)

A report in the China Securities newspaper said the CSRC has fined four securities investment advice companies a combined 449 mln yuan, and ordered the confiscation of a total of 449 mln yuan in illegal income, after the companies were caught using cross-trading to manipulate the price of A-share Yorkpoint S&T Co Ltd.	    The report said the four firms, Guangdong Xinsheng Investment Advise Co Ltd, Guangdong Zhongbai Investment Advise Co Ltd, Guangdong Baiyuan Investment Advise Co Ltd and Guangdong Jinyi Investment Advise Co Ltd, accumulated holdings accounting for 85 pct of Yorkpoint's traded shares.	    The firms together used 627 personal share trading accounts and three corporate trading accounts to cross-trade their shares in Yorkpoint, manipulating the stock's price and trading volume and earning a combined profit of 449 mln yuan.	    Shenyin & Wanguo Securities analyst Yan Dinggong said news of the punishment for manipulators could have a major negative impact on market sentiment.	    "The methods used by the four companies (to manipulate share prices) are very widely used in the Chinese stock markets. The companies were only caught because they got too brave and pushed up prices too sharply too quickly and attracted attention from the CSRC.	    "Actually many other institutions have been doing the same job (less conspicuously)," he said.	    However, the CSRC's decision to punish the four firms is like "killing the chicken to scare the monkeys", and it may cause other institutions to curtail their manipulating activities, at least for a short period, he said.	    One analyst at Xiangcai Securities said the composite index dropped below its 30-day moving average at 2,114 points, then dropped to test a key support level at 2,100 points before recovering amid institutional support.	    If the index breaks below 2,100 points, prices could undergo a sharp correction, he said. 

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