By Li Zengxin (m.ming7.cn)
Updated: 2007-07-10 16:28

Financial shares continued a surging wave despite the drawback in the market. China Merchants Bank, which announced it anticipated doubled net profit for the first half today, went up 7.76 percent to pioneer the banking stocks. China Life gained another 1.97 yuan today and Hongyuan Securities saw a perfect 10 percent hike in share prices. All financial shares were up today.

Stocks in the real estate, agriculture and pharmaceutical were also more resistant than the others.

Closed-end mutual funds dived, with both the indices dropping over 1.5 percent. B shares were weak. Of the 109 listed B shares, only 15 went up and three ended flat. Wuhan Boiler climbed 10 percent to 11.76 yuan, today's biggest B-share gainer.

The recent resurgence of the stocks has brought more new investors to the market. For the first time since June 25, new A-share account opening stopped shrinking yesterday. Daily new stock investment accounts have been shrinking for most of the last month, including when the market met with turbulent fluctuations since May 29.

New Account Opening
Source: China Depository and Clearing Co Ltd

Date	A share	B share	Mutual fund	Total
2007-07-02	99,957	780	35,006	135,743
2007-07-03	79,977	759	25,992	106,728
2007-07-04	70,132	761	20,460	91,353
2007-07-05	62,953	715	16,572	80,240
2007-07-06	74,870	781	12,365	88,016
2007-07-09	93,735	758	31,954	126,447

According to the Hang Seng China AH Premium Index debuted in Hong Kong yesterday, dually listed companies' share prices in Shanghai are 33.24 percent higher than their counterparts in Hong Kong.

The index was down 0.21 points, or 0.16 percent, to 133.24 on its debut yesterday, showing that H-share prices have narrowed the gap with A-share prices but still lag far behind. The index stands at 100 if the two prices are at par.

The index was one of the four launched by Hang Seng Index Services Ltd, the index manager of Hong Kong's stock exchange. The other three are the Hang Seng AH (A+H) Index, Hang Seng China AH (A) Index and Hang Seng China AH (H) Index. They gauge the performance of A and H shares together, as well as A and H share prices individually.

The indices cover 27 companies that trade both in Shanghai and Hong Kong. The four largest index constituents include China Life, Sinopec Corp, China Merchants Bank and the Industrial and Commercial Bank of China. The four constitute almost half of the index.

Analysts hailed the launch of the indexes. "With more mainland companies trading shares in both markets, Hong Kong investors are now paying special attention to Shanghai and Shenzhen markets," said Ricky Tam, chairman of Hong Kong Institute of Investors.

There is also less encouraging news though. Industrial experts expect the consumer price index (CPI) to grow over 4 percent in June, judged by the available data on agricultural produce and food price last month.

The wholesale agricultural produce index rose to 143.5 in June, compared with 136.8 in May. In other words, the wholesale price grew over 0.3 percent month-on-month over May. And the growth of the wholesale price last year was -0.5 percent over last May. The gap, or 0.8 percent, is likely to push up the CPI growth to over 4 percent from 3.4 percent for May, because food price is the largest proportion in the composition of CPI, said an analyst with Guohai Securities.

Experts from other securities houses including Guotai Jun'an and Shenyin Wanguo had the same expectation, according to the First Financial News. They also anticipate further monetary tightening measures by the central bank this month, if the CPI keeps continues to rise as expected.

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