BEIJING: China’s stocks fell to a three-week low amid concern new share sales will divert funds from existing equities and as securities firms tumbled after regulators said they may allow banks to conduct brokerage businesses.
Citic Securities Co. and Haitong Securities Co. retreated more than 4 percent after the China Securities Regulatory Commission said it’s considering allowing banks to apply for brokerage licenses. Jiangxi Copper Co. and Yanzhou Coal Mining Co. dropped at least 2.9 percent to pace declines for raw-material shares as a steeper-than-forecast drop in imports signaled weak demand.
The Shanghai Composite Index fell for a third day, losing 0.9 percent to 3,210.86 at the 11:30 a.m. break. Twenty-three companies including Orient Securities Co. are scheduled to sell new shares from Tuesday to Friday. The sales are expected to freeze about 3 trillion yuan ($479 billion), according to the median estimate of 12 brokerages surveyed by Bloomberg News.
“It’s the week of new share subscriptions so liquidity will come under pressure,” said Wu Kan, a fund manager at Dragon Life Insurance Co. in Shanghai. “For brokerages, that’s bad news as that means more competition from possibly bigger rivals from the banking sector.”
Hong Kong’s Hang Seng China Enterprises Index declined 1.2 percent, led by financials. The CSI 300 Index slid 1.3 percent. The Hang Seng Index lost 0.8 percent. The Bloomberg China-US Equity Index fell 1 percent in New York on Friday, tracking losses for U.S. stock gauges after American jobs data spurred traders to bring forward bets on higher interest rates.