Mainland shares closed higher yesterday on a technical rebound as worries over a deluge of shares from new issues tapered off. The Shanghai B-Share Index erased some gains to end 0.484 point stronger at 54.856 points on lower turnover of US$11.14 million from $15.13 million. The Shenzhen B-Share Index finished 1.93 points higher at 110.49. Turnover plummeted to HK$63.5 million from $141.29 million. 'The indices bounced back [yesterday] on technical reasons,' Ping An Securities analyst Wu Zhanfeng said. Traders said some funds were diverted to old counters from Thursday's new listings - one on Shenzhen's B-share market and four on A-share exchanges. 'There aren't as many listings on the A-share market as [Thursday]. So the A stocks went up and B shares followed them,' Mr Wu said. Market interest in Foshan Huaxin Packaging, the first B-share initial public offering in a year, cooled with turnover plunging to HK$16.09 million from Thursday's $80 million. The counter still ended the day higher, however. Traders said the B-share indices were likely to be range-bound as investors awaited the interim results of listed companies. A further seven firms yesterday announced they expected to report net losses in the six months to June, bringing the number of firms to publish such announcements to 43. Mid-year results are due by the end of next month. The Shanghai A-Share Index rose 32.253 points to 2,053.126, on turnover of 10.66 billion yuan from 8.69 billion yuan previously. The Shenzhen A-Share Index was up 8.06 points at 647.48. Turnover was 9.74 billion yuan from 9.21 billion yuan previously. Dealers said A shares found support from institutional buying of large-caps, particularly steel stocks, but turnover remained thin amid cautious sentiment and a lack of retail buying. Despite the gains, the market's upside potential appeared weak, particularly given uncertainty about the government's fund-raising plans and concerns about the quality of listed companies' interim earnings. One of the companies to warn of interim net losses was Xiamen Xiaxin Electronics, which heightened fears key companies would not see an improvement in earnings despite the stronger economic environment in the first half, dealers said. Institutional buying lifted prices from flat in the final minutes of each trading session, while turnover remained thin amid weak retail buying.
