Chinese shares ended Wednesday up 1.32 percent, their first rise this week, as optimism grew that the market could absorb Industrial and Commercial Bank of China's massive initial public offer.
ICBC's Shanghai IPO, taking place this week, will mean a record cash call of 46.64 billion yuan ($5.9 billion) if it is priced at the top of its range and an overallotment option is exercised.
But Wu Ang, analyst at CITIC Securities, said it appeared the offer was not draining too much money from the market and was attracting new funds. "Worries over the long term are unnecessary, as new funds are being injected into the market," he said. The benchmark Shanghai composite index closed at 1,787.185 points. Turnover in Shanghai A-shares was a moderate 20.1 billion yuan, down from 21.5 billion yuan on Tuesday.
Wu expects the uptrend to last through the end of October, when ICBC lists, and predicts a climb above 1,800 then. Technical support at 1,750 points, the mid-September highs, looks increasingly solid, traders said.
Listed funds of Huaan Fund Management stabilised after being sold on Tuesday on news that the company's general manager had been detained in a corruption probe. An Xin Fund, down 1.65 percent on Tuesday, gained 1.05 percent to 0.962 yuan.
Property stocks, which suffered late last month because of the Shanghai corruption scandal, were strong. China Vanke, the country's biggest listed property developer, surged 6.39 percent to 7.66 yuan while Poly Real Estate Group jumped 4.02 percent to 26.91 yuan.
Pudong Development Bank surged 7.14 percent to a 40-month closing high of 12.91 yuan, while Minsheng Bank rose 4.14 percent to 5.78 yuan. "The market rallied in the morning, laying the base for a further rise and giving investors the impression that there may be a short-term rebound," said Wu.
Changan Auto gained 1.74 percent to 5.25 yuan after it said on Wednesday it expected a 146.32 percent jump in third quarter net profit from a year earlier. Small software firm Qingdao Mesnac, which listed in Shenzhen on Wednesday, traded as high as 53.46 yuan, up 106 percent from its initial public offer price of 26.00 yuan. It closed at 50.51 yuan.
This helped boost the overall technology sector, with Eastern Communications up 3.7 percent at 3.36 yuan. Chinese distiller Sichuan Swellfun Co ended up 5.33 percent at 9.28 yuan after going its 10 percent limit up earlier. Resuming trading after a two-day halt, it confirmed it was in contact with several international makers of alcoholic drinks, including Diageo, to discuss matters such as overseas sales. It said it had not signed any merger or other agreement. China Wuyi Co Ltd rose 2.13 percent to 3.83 yuan after saying it had won a highway construction project in Kenya worth 387 million yuan.
Comments
Comments are closed.