Shanghai, Shenzhen Stock Markets Reopen, Report Mixed
Results
The Shanghai and Shenzhen stock markets, which had been
closed for two weeks because of the May Day holiday and
SARS crisis, reopened on Monday, May 12. Both reported
mixed trading results with industries reported to benefit
from the SARS crisis showing gains, while industries hit
hard by the crisis showed significant losses.
There was little demand for industries hit hard by the
crisis, such as airlines, transportation, hotel and restaurant
shares, even though the government had offered a tax
cut package to cut their losses. Traders said that
the packages would not offset the fact that these industries
would make significant losses this year because of the
SARS crisis.
Companies which did well in trading were concentrated
in the automobile, pharmaceutical, power and finance industries,
and are generally considered to stand to benefit from
the SARS crisis. Blue chips in these sectors performed
especially well.
Petrochemical industry shares also performed well because
the Chinese government has started levying anti-dumping
fees on imported petrochemical products to protect China’s
domestic companies.
The Shanghai market closed up 10.42 points at 1531.47,
and the Shenzhen market also closed up at 46.26 points
at 3307. Volume on the two markets was a low RMB19.8 billion
(US$2.4 billion).
Most analysts believe that the market will shortly reach
its low point, and then will begin its recovery from the
SARS crisis.
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