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Shares rebound from four-day losing streak
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Shanghai's key stock index snapped a four-day losing streak today after the regulator said it will be stricter in approving additional share sales.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, added 1.09 percent, or 48.01 points, to 4,446.82.

The index plunged 4.07 percent to a seven-month low yesterday.

Gainers in the Shanghai market outnumbered losers 465 to 362 while 25 were unchanged.

The Shenzhen Composite Index, which covers the mainland's smaller stock market, declined 0.67 percent, or 8.91 points, to 1,322.32.

China's securities regulator said late yesterday it will "strictly" examine applications from listed companies seeking to sell additional shares after investors expressed concern that rising supply triggered recent sell-offs.

Companies should "prudently" consider the amount, timing and affordability of offerings before deciding on secondary fundraisings, the regulator said.

Shanghai Pudong Development Bank Co led lenders higher today.

Pudong Bank, partly owned by Citigroup Inc, rose for the first time in five days on expectations that the bank may delay or reduce a planned sale of one billion additional shares. It jumped 3.82 percent, or 1.49 yuan (21 US cents), to close at 40.49 yuan while China Merchants Bank Co also added 1.95 percent, or 0.58 yuan, to 30.36 yuan.

China Merchants, the nation's largest dual-currency credit card issuer, had dropped to an almost seven-month low on concern the end of a two-year share lock-up this week will spark a sell-off by institutional investors.

The remarks also lifted Ping An Insurance (Group) Co, which has plunged 34 percent since it announced on January 18 that it plans to issue a maximum of 1.2 billion new shares to replenish capital after it invested 1.81 billion euros (US$2.7 billion) in Belgium's Fortis. The stock jumped 4.07 percent, or 2.66 yuan, to 68.04 yuan.

On the other side, China Unicom, which controls the nation's second-largest cell phone operator, continued to fall today. It lost 4.21 percent, or 0.46 yuan, to finish at 10.46 yuan. The stock dived 9.98 percent yesterday.

China plans to reorganize its telecommunications industry to form three business groups through the breakup of mobile-phone operator China Unicom.

China Unicom's smaller code division multiple access network, or CDMA, will be sold to fixed-line operator China Telecom Corp, while its larger global system for mobile communications service will be acquired by China Netcom Group Corp.

(Shanghai Daily, February 26, 2008)

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