China's major stock index dropped 2.31 percent on the week's last trading day on news of imminent offerings by industrial giants and warnings from a State Council official that Chinese share prices were soaring far higher than major indices abroad. The benchmark Shanghai Composite Index, which covers both A and B shares, closed at 5,777.8 points, down 2.31 percent. The Shenzhen Component Index on the smaller bourse ended at 18,564.33 points, down 3.03 percent.
Heavy weights saw sluggish growth while stocks of mining companies, coal producers and airlines all fell, with China Southern, China Eastern and Hainan airlines all down between four and six percent.
Datong Coal Industry dropped 7.73 percent and China Shenhua slipped 4.26 percent.
China Aviation Optical-Electrical Technology Co. dropped by the daily limit of 10 percent. Jien Nickel Industry Co. tumbled by 9.52 percent. The share prices fell 1.84 percent in the morning session after both bourses started sharply lower amid concerns of strained funds on the news of the imminent listing of PetroChina.
The Shanghai Composite Index ended the morning session at 5,805.39 points, down 108.9 points from the previous closing.
PetroChina Company Limited, the listed arm of the country's largest oil producer, announced Thursday that trading of its A shares is expected to start on the Shanghai Stock Exchange on Nov. 5.
The company is expected to raise a record 66.8 billion yuan (8.95 billion U.S. dollars) from its sale of four billion A shares, surpassing the 66.58 billion yuan achieved by China Shenhua Energy Company, the country's largest coal producer, earlier this month.
China Quanjude (Group) Co., Ltd, a famous Peking roast duck restaurant chain, has announced it plans to issue up to 36 million shares on the Shenzhen Stock Exchange to raise at least 380 million yuan. The online offering would start on Nov. 5.
The A share offering of China Railway Engineering Corp., Asia's biggest railway and tunnel contractor, will be discussed by officials of China Securities Regulatory Commission (CSRC) on Monday. If the offering is approved, the company could raise around two billion U.S. dollars in Shanghai, according to company sources.
The stream of offerings had "frozen" a considerable amount of money as investors could have withheld their money to buy blue chips, said analysts.
In an article published in Capital Markets magazine on Thursday, Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, wrote that Chinese share prices were rising "sharply", exceeding major stock indices abroad during the first eight months of the year.
Analysts suggested investors avoid companies that lack growth potential and be cautious of buying stocks in a market downfall.
(Xinhua News Agency November 3, 2007)
