China Stock Market Research

China A-shares closed sharply lower for a second day after China Merchants Bank announced a large exposure to Lehman Brothers, raising concerns about how much of the latter’s securities are held by other financial institutions.

China Merchants Bank (SSE:600036, HKG:3968) fell 9.96 pct to 14.47 yuan after tumbling almost 10 pct yesterday. It said it holds about 70 mln usd in Lehman debt securities.

Dairy firms plunged after authorities said they found more cases of melamine contamination in infant milk powder products. The new findings involve 22 firms, including Inner Mongolia Yili Industrial Group (SHA 600887).

Property developers also weighed on the market, while oil refiners were supported following a further decline in crude oil prices.

The benchmark Shanghai Composite Index closed down 57.59 points or 2.90 pct, at 22- month low of 1,929.05. The index has fallen 63.3 pct so far this year.

Turnover fell to 32.01 bln yuan from 33.82 bln yesterday.

The Shanghai A-share Index was down 60.07 points or 2.88 pct at 2,025.60, while the Shenzhen A-share Index fell 11.04 points or 1.84 pct to 587.70.

China B-shares closed sharply lower, extending yesterday’s decline, with property developers remaining under pressure amid a weak outlook for the sector, dealers said

All stocks in Shanghai finished in negative territory, while only one stock rose in Shenzhen.

China Vanke ( SZB 200002; SZA 000002), the country’s top property developer by market value, fell more than 7 pct in Shenzhen, while Shanghai Wai Gaoqiao Free Trade Zone Development (SHB 900912; SHA 600648) fell by the 10 pct daily limit in Shanghai.

The Shanghai B-share Index fell 9.36 points or 7.51 pct to 115.29, while the Shenzhen B-share Index was down 13.26 points or 4.30 pct at 295.33.

(Source XFN-Asia)

Filed under: Chinese Stocks, Market Summary by CSMR