Wednesday, October 17, 2007

Hope for the BEST and plan for the WORST


China's stocks fell, with the key index dropping the most in five weeks, after Beijing regulators said they may allow arbitrage between shares traded on the mainland and Hong Kong. China Merchants Bank Co. led declines of A shares with Hong Kong listings.
Wuliangye Yibin Co. fell after saying third-quarter profit declined 10 percent from a year earlier. Ping An Insurance (Group) Co. gained after reporting premiums in the first nine months of the year.
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, slid 152.49, or 2.6 percent, to 5,671.63 at as of 10:03 a.m. local time, the biggest decline since Sept. 11.
Tu Guangshao, vice chairman of the China Securities Regulatory Commission, said in Beijing yesterday that the panel is studying a proposal to allow swaps in A and H shares of Chinese companies. ``We will announce the result of the study soon,'' he said.
Limits on investments in and out of China have helped the mainland's CSI 300 Index almost triple this year, making the Hong Kong-traded shares of Chinese companies a cheaper alternative for investors.
China Merchants, the nation's fourth-largest bank by market value, fell 0.81 yuan, or 2 percent, to 39.99. China Petroleum & Chemical Corp., Asia's biggest refiner, fell 0.40 yuan, or 1.5 percent, to 25.73. Tsingtao Brewery Co., China's second-largest brewer, dropped 0.33 yuan, or 0.9 percent, to 37.97.

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