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Bs roar as punters wait
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Yang Yunfei
HUNDREDS of thousands of new punters waited in vain for sellers yesterday, the second day of trading since local investors were alllowed into the B share market formerly reserved for foreigners, as long-time players sat tight and refused to offload their portfolios.
In a re-run of Wednesday, China B shares soared nearly their 10 per cent daily limit within minutes of the opening bell as bids continued to pour in.
The Shanghai B Share Index soared 9.91 per cent to close 9.05 points ahead at 100.479. Turnover was only US$183,000, down from Wednesday's thin US$753,000.
The Shenzhen B Share Index surged 9.75 per cent to close at 153.75 on thin volume of HK$242,000 (US$31,000), down from Wednesday's HK$1.117 million.
Daily volume in Shenzhen averaged about HK$80 million before the foreign currency denominated B shares were opened to mainland investors last week, while Shanghai logged about US$20 million.
Anticipating a surge in B shares, thousands of local investors have flocked to securities houses to open trading accounts since the start of the week.
Some 341,000 new B share accounts were added in Shenzhen and Shanghai on Monday and Tuesday alone, compared to 280,000 over the past decade.
State media said that investors racing to place B share orders jammed switchboards and crashed telephone systems in some parts of Shanghai on Wednesday morning.
Reports said that unsatisfied orders on Wednesday, received after counters hit their upper ceiling of 10 per cent, totalled 13.54 billion yuan (US$1.64 billion), compared with the US$7.8 billion market capitlization.
China caps daily share price movement to 10 per cent and a spokesman for the Shenzhen Stock Exchange dismissed the rumour on Wednesday that the 10 per cent up limit would be changed to allow the rally to play out.
Would-be buyers, lured by the sharp price gap between A and B shares, were forced to the sidelines as few people were willing to sell, expecting the influx of money would push B shares up some 30 to 50 per cent over a few days.
Volume was extremely thin and only a single lot, or 100 shares, changed hands in some of the 114 counters.
Analysts said that even fewer investors were willing to sell yesterday.
“Anybody who has half a brain is not going to sell," said a trader surnamed Li at a branch of Guotai Jun'an Securities in downtown Shenzhen yesterday afternoon.
As new investors searched far and wide for any offer, analysts said that the clear strategy for them is to gobble up any crumb they could get.
“Pay no attention to fundamentals, buy everything you can get your hands on as it is all liquidity," suggested Tang Wanming at China Eagle Securities.
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