Shenzhen shares close higher; B-shares boosted by interest rate cut

SHENZHEN (AFX-ASIA) - A-share prices closed higher in line with gains on the B-share market, while turnover was minimal, with many investors remaining sidelined following the market's week-long break, dealers said.	    B-share prices closed higher after a cut in interest rates on domestic Hong Kong dollar deposits, effective from May 1, boosted market liquidity, they said.	    Some analysts said B-share liquidity has also received a slight boost from recent government moves to stop domestic brokerages providing services enabling domestic investors to trade Hong Kong shares.	    The A-share sub-index rose 38.30 points or 0.72 pct to 5,314.65 on turnover of 4.46 bln yuan after trading between 5,321.51 and 5,277.62.	    The B-share sub-index closed 22.69 points or 1.1 pct higher at 2,099.37 after trading between 2,116.47 and 2,083.50.	    The component A- and B-share index closed 36.21 points or 0.75 pct higher at 4,838.80 on turnover of 5.93 bln yuan after trading to a high of 4,846.51 and a low of 4,809.24.	    Analysts said underlying sentiment in the A-share market was cautious amid heightened expectations that the government will soon launch its plan for the flotation of state shares in listed firms.	    The fact that official securities newspapers today published several commentaries arguing that the negative impact of the flotation of state shares will be limited has been interpreted as a sign that the government is priming investor sentiment ahead of the launch of the flotation plan, they said.	    They added that B-shares were boosted by last week's cut in interest rates on domestic usd and hkd deposits, and by expectations that the U.S. Federal Reserve will cut interest rates again next week.	    Effective from May 1, the Bank of China cut the domestic one-year Hong Kong dollar deposit rate to 3.125 pct from 3.5 pct.	    China Securities sales manager Zhang Jie said B-shares may have received a slight boost from recent moves by securities regulators in Shenzhen to stop local brokerages trading Hong Kong stocks.	    Zhang said many domestic brokerages had taken to offering services allowing domestic investors buy Hong Kong shares, but securities regulators recently moved to stop this practice.	    "This means investors with large amounts of foreign currency will find it more difficult to invest overseas, but it doesn't mean too much of this money is going to be forced back into the B-share markets," she said, adding that many investors feel B-shares are already overpriced.	    "Nonetheless, given a lack of investment choices, some of this money may be coming back (to the B-shares)," she said.	    Guangdong Electric Power rose 0.05 yuan to 11.6 on 1.6 mln shares.	    China Bicycle rose 0.43 yuan to 9.08 on 4 mln shares.	    Shenzhen Development Bank dropped 0.03 yuan to 15.5 on 2.6 mln shares.	    Monkey King shed 0.06 yuan to 7.2 on 4.1 mln shares.	    Among B-shares, Wuhan Boiler rose 0.36 hkd to 8.2 on 10.3 mln shares, while Beijing Orient Electronics gained 0.39 hkd to 11.48 on 3 mln shares and China Southern Glass rose 0.08 hkd to 9.06 on 2.8 mln shares.	    Shenzhen North Jianshe rose 0.32 hkd to 8.25 on 5.5 mln shares.

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