China's stocks fell, dragging the nation's benchmark to a three-week low, on speculation new shares will dilute existing holdings and after the central bank said it will continue to order banks to set aside more reserves.
China Merchants Bank Co. dropped to an almost seven-month low on concern the ending of a two-year share lock-up this week will spark a sell-off by institutional investors. China Vanke Co. led developers lower after the People's Bank of China said it will ``vigorously'' reduce money supply by raising banks' reserve ratio, restricting funds available for loans.
China Railway Construction Corp., which starts accepting subscriptions for its initial share sale today, also added to concerns funds will be diverted from existing issues.
``There's a lot of supply flowing into the market and that's affecting sentiment,'' said Gabriel Gondard, who helps manage the equivalent of $10 billion at Fortune SGAM Fund Management Co. in Shanghai. ``Investors are also concerned over the way the central bank will rein in inflation, which adds uncertainties in the stock market.''
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, fell 2.8 percent to 4,570.67 as of 1:07 p.m. in Shanghai, headed for its lowest close since Feb. 1. All 10 industry groups fell, with a gauge of financial and property shares contributing the most to the main index's decline. The measure is down 22 percent since its Oct. 16 peak.
Merchants, Pudong Bank
China Merchants, the nation's largest dual-currency credit card issuer, fell 0.75 yuan, or 2.5 percent, to 29.60, the lowest level since Aug. 1. Shanghai Pudong Development Bank, the Chinese partner of Citigroup Inc., declined 0.85 yuan, or 2.1 percent, to 39.13. The bank said last week it is studying a plan to sell new shares to the public.
China will stick with a tight monetary policy as controlling inflation remains a top priority, said Yi Gang, vice governor of the People's Bank of China, yesterday at an economic forum in Beijing. The central bank will ``vigorously'' soak up liquidity by raising the level of reserves that banks must keep on hand, he said.
Vanke, the nation's biggest publicly traded developer, fell 0.9 yuan, or 3.8 percent, to 23.09. Financial Street Holding Co., a Beijing-based developer, lost 1.49 yuan, or 6.3 percent, to 22.14, the biggest drop since Jan. 28.
China Construction Corp., the builder of more than half of the nation's rail links since 1949, may raise $5.4 billion in first-time stock sales in Shanghai and Hong Kong, said four people with direct knowledge of the plans. That would be the world's biggest stock sale this year.
China Merchants Bank Co. dropped to an almost seven-month low on concern the ending of a two-year share lock-up this week will spark a sell-off by institutional investors. China Vanke Co. led developers lower after the People's Bank of China said it will ``vigorously'' reduce money supply by raising banks' reserve ratio, restricting funds available for loans.
China Railway Construction Corp., which starts accepting subscriptions for its initial share sale today, also added to concerns funds will be diverted from existing issues.
``There's a lot of supply flowing into the market and that's affecting sentiment,'' said Gabriel Gondard, who helps manage the equivalent of $10 billion at Fortune SGAM Fund Management Co. in Shanghai. ``Investors are also concerned over the way the central bank will rein in inflation, which adds uncertainties in the stock market.''
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, fell 2.8 percent to 4,570.67 as of 1:07 p.m. in Shanghai, headed for its lowest close since Feb. 1. All 10 industry groups fell, with a gauge of financial and property shares contributing the most to the main index's decline. The measure is down 22 percent since its Oct. 16 peak.
Merchants, Pudong Bank
China Merchants, the nation's largest dual-currency credit card issuer, fell 0.75 yuan, or 2.5 percent, to 29.60, the lowest level since Aug. 1. Shanghai Pudong Development Bank, the Chinese partner of Citigroup Inc., declined 0.85 yuan, or 2.1 percent, to 39.13. The bank said last week it is studying a plan to sell new shares to the public.
China will stick with a tight monetary policy as controlling inflation remains a top priority, said Yi Gang, vice governor of the People's Bank of China, yesterday at an economic forum in Beijing. The central bank will ``vigorously'' soak up liquidity by raising the level of reserves that banks must keep on hand, he said.
Vanke, the nation's biggest publicly traded developer, fell 0.9 yuan, or 3.8 percent, to 23.09. Financial Street Holding Co., a Beijing-based developer, lost 1.49 yuan, or 6.3 percent, to 22.14, the biggest drop since Jan. 28.
China Construction Corp., the builder of more than half of the nation's rail links since 1949, may raise $5.4 billion in first-time stock sales in Shanghai and Hong Kong, said four people with direct knowledge of the plans. That would be the world's biggest stock sale this year.
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