Chinese shares continue to dip in fourth consecutive days

Major Chinese stock market indices dropped Friday in the fourth consecutive day as investors' confidence was weakened by unfavorable reports on State share reform and higher oil prices.

The benchmark Composite Stock Index of Shanghai Stock Exchange, which covers yuan-denominated A shares and foreign-currency B shares, closed at 1,151.98 points, 0.69 percent lower.

The Component Stock Index of Shenzhen Stock Exchange closed at 2,892 points, a drop of 12 points, or 0.44 percent lower.

The two major indices on Shanghai and Shenzhen markets closed Monday at 1,282.59 points and 3,195.95 points.

Total transaction volume of the two markets stood at 14.4 billion yuan (1.77 billion US dollars) on Friday, compared with Thursday's 22.3 billion yuan (2.7 billion US dollars).

Unconfirmed reports government officials have criticized current practice of paying compensation by listed firms, mostly controlled by State-owned firms, for the right to float their untradable shares.

Investors fear listed firms may pay less in their future share reform to minority stockholders.

About two thirds of the shares of domestically listed firms are not tradable as committed by those firms.

Such arrangement was designed for the State to maintain its absolute control of the State firms in early 1990s China began to set up its securities market system.

Lu Zhenjin, an analyst with Xindingsheng Securities Firm, said the downward market readjustment is inevitable for both technical and economic reasons.

The two major indices for the Chinese stockmarkets rose by about 20 percent in the past three months, and some individual shares jumped by up to 50 percent, and it is only natural for them to fall under unfavorable conditions.

Source: Xinhua