China's Shares Fall Sharply
Monday July 31, 5:58 am ET
China's Shares Fall Sharply As Traders Raise Cash Ahead of String of IPOs
SHANGHAI, China (AP) -- China's shares fell sharply Monday for the third straight session as traders raised cash ahead of a series of large new listings.
The benchmark Shanghai Composite Index ended down 2.97 percent at 1612.73. The Shenzhen Composite Index for China's smaller second market fell 3.95 percent to 406.09.
Investors were watching Daqin Railway, which is due to start trading Tuesday in Shanghai.
"Investors have remained cautious recently. They held onto funds pending Daqin Railway's new listing in Shanghai tomorrow, as most of them believe they will gain at least 20 percent from new share debuts with low risk," said Liu Yisong, an analyst at Galaxy Securities.
A planned initial public offering by Air China also has weighed on the market, especially because its fundamentals are better than those of other Chinese airlines, analysts said.
Air China aims to list up to 2.7 billion shares on the Shanghai exchange before Aug. 22, the company said in its prospectus Monday.
Shares in the country's biggest carrier, China Southern Airlines, fell 3.6 percent, while No. 2 China Eastern Airlines dropped 2.2 percent.
An IPO by Poly Real Estate soared on its trading debut on Monday, closing up 44.9 percent from its opening price.
"The strong debut by Poly showed there is pent-up demand for new listings and the current price for Poly has been extremely high," said Chen Huiqin, an analyst at Huatai Securities.
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