BEIJING: China’s stocks retreated, paring a weekly advance, as financial companies declined before the resumption of initial public offerings after a five-month freeze.
Poly Real Estate Group Co. and Bank of China Ltd. declined more than 3 percent as a gauge of financial stocks fell for the first time in five days. Hebei Iron & Steel Co. led commodity companies lower, while China Railway Group Ltd. climbed 2.3 percent after the company announced a 11.55 billion yuan ($1.8 billion) asset swap with China Railway Erju Co.
The Shanghai Composite Index lost 1.2 percent to 3,543.14 at 11:03 a.m. local time. The gauge advanced 4.3 percent this week through Thursday on speculation the People’s Bank of China will extend monetary easing as the government tackles the sharpest economic slowdown in a quarter of a century. Ten Chinese companies began subscriptions for IPOs this week, the first of 28 offerings this month that could tie up 3.4 trillion yuan, according to estimates compiled by Bloomberg. China Securities Regulatory Commission has approved a second batch of 10 IPOs, according to a statement on its official microblog.
“After the recent performance, the financial sector could come under some pressure as recent positive developments are already largely priced in,” said Gerry Alfonso, a trader at Shenwan Hongyuang Group Co. in Shanghai. “The announcement of the details of the second IPO batch could also add some downward pressure on the overall market as there are now exact dates, rather than guesswork.”
