SHARES on the CLSA Shanghai B index were mixed as many China fund managers continued meetings with senior officials from more than half of the 15 listed companies, to discuss corporate prospects. Friendship Store was the day's star performer, surging 13.5 per cent to 42 cents, with shares worth US$80,000 changing hands. 'The retail sector is where all the good news is,' said Terence Mahony, chief investment officer of global emerging markets at HSBC Asset Management. Friendship Store officials had lunch with a group of China fund managers in Shanghai for a special China share workshop organised by Credit Lyonnais Securities. The CLSA Shanghai B index rose 0.22 per cent to 572.17 points on trading worth $2.43 million. Companies which have predicted flat earnings in 1995 due to government credit controls continued to pay a heavy price. Shanghai Industrial Sewing Machine fell 14.1 per cent to 22 cents. The textile machinery maker said on Thursday it expected to achieve a net profit of 51.8 million yuan this year, compared with 51.1 million yuan in 1994, using Chinese accounting practices. According to international accounting standards, the company's net profit fell 50 per cent last year to 32.5 million yuan. That fell far below the company's target figure of 76.8 million yuan, which the company had revised down from 92.1 million yuan. Government loan restrictions aimed at curbing inflation have crimped earnings and increased inter-enterprise debt in China's machinery sector. High cotton and synthetic fibre prices have also caused some companies to scale back machinery purchases. Fellow textile machinery manufacturer Erfangji fell 4.2 per cent to 13.8 cents with shares worth $160,000 changing hands. Shanghai Diesel rose 0.7 per cent to 61.2 cents on trading worth $700,000, a day after telling a group of China fund managers its diesel engine sales picked up in the first quarter. The CLSA A index gained 0.5 per cent to 3,129.12 points.