DESPITE frenetic activity on the A-share market yesterday, Shanghai's B-index lost ground, led by new-listing Shanghai Posts and Telecommunications which fell three per cent to 59 cents, with trading in its shares accounting for a third of overall turnover.
Traders said many of the sales were by stags, investors who subscribed to a popular issue to make quick gains. The stock gained 44 per cent on its debut last Thursday and rose a further 6.7 per cent on Friday.
'In the long term, Shanghai Posts is a nice share and its price will be rising in the long term, but now the profit-taking pressure is increasing,' said Edmond Huang, analyst at Baring Securities in Shanghai.
Smith New Court's Timothy Mou said the price fall of Shanghai Posts affected the confidence of the market and the price of other shares, especially Shanghai China International Travel which fell 1.8 per cent, Bloomberg reported.
'At the moment I can't see any positive factors to drive up prices because inflation is still quite high,' said Mr Mou.
The Credit Lyonnais B-share index lost 2.69 points, or 0.31 per cent, to close at 858.93. The A-share index soared 419.04 points, or 10.78 per cent, to end at 4,306.64. Turnover was about half of Friday at 5.5 billion yuan.
