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China's hard-currency B shares surged nearly 10 percent yesterday as investors rushed in to buy after the market resumed trading.
Most of the 114 B shares in Shanghai and Shenzhen rose to their daily trade limit of 10 percent.The Shanghai B share index rose 8.222 points during the day to close at 91.423. Shenzhen's B share sub-index also advanced 80.24 points to 946.41.
Yesterday was the first day of trading for the B share market since it was suspended in the afternoon of February 19, hours before regulators announced that domestic investors would also be allowed to trade B shares. The market was previously reserved for foreign investors.
Hundreds of thousands of Chinese residents who have foreign currency deposits have lined up in front of branches of banks and securities houses to open B-share accounts in the past three days.
"People are pinning hopes on the hard currency market, whose prices are generally much lower than domestic A shares," said Dong Chen, an analyst of China Securities.
Analysts expect the rally to continue in the rest of this week's trading sessions.
Though there might be a correction after the bullish rise, the long-term prospect of the hard currency bourses is bright as market liquidity and investing sentiment continue to improve, an analyst with a foreign brokerage said.
The rosy market outlook also makes new B-share IPOs (initial public offerings) more attractive in the future, he said.
For now, though, people should remain rational in making investment decisions and choose the stocks with good performance and liquidity instead of blindly following suit, Dong warned.
Already, investors are confronted with the problem that there are too many orders to buy and too few willing sellers, reflecting thin trading volume yesterday.
(China Daily 03/01/2001)
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