Mainland B shares rose for the second day yesterday as mainland investors bought stocks being dumped by foreign funds.
Traders said foreign investors were worried the yuan would eventually be devalued in the wake of the regional currency crisis while mainland investors were attracted by the huge discount at which B shares traded relative to their A-share counterparts.
The Shanghai B-Share Index gained 2.463 points, or 5.73 per cent, to 45.474 points on a turnover of US$8.6 million.
In Shenzhen, the B-Share Index rose 3.61 points, or 4.54 per cent, to 83.22. Turnover was HK$29 million.
Dresdner Kleinwort Benson Securities (Asia) China equities sales Lydia Leung said foreign investors sold heavily on worries the yuan would be pressured, hurting corporate earnings.
The shares were taken up by mainland investors, who are nominally banned from trading B shares but seem to operate quite actively in the market.