Shanghai Composite Breaking Another Six-Year Low Tonight

[HenryTo]

Just keeps on hitting low after low:

http://finance.yahoo.com/q/bc?s=%5ESSEC&t=my&l=on&z=m&q=l&c=

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Asia benchmarks mixed in early trade
Shanghai slumps; Nikkei edges down at midday

By MarketWatch
Last Update: 11:09 PM ET May 11, 2005

TOKYO (MarketWatch) -- Asian benchmarks were mixed in early trading Thursday, with liquidity fears again pressuring China's Shanghai Composite index.

Japanese stock indexes edged down by midday.

The Nikkei 225 Average was down 0.1%, or 11.34 points, at 11,109.36. The broader Topix of all Tokyo Stock Exchange first section issues was down 1.91 points at 1,143.39.

China's Shanghai Composite index, which has wallowed around six-year lows in recent sessions amid liquidity fears raised the government's plan to sell state-owned shares, was down 0.6%.

The China Securities Regulatory Commission last week said it had selected four companies to participate in a pilot program of non-tradable state-owned share sales. Such shares account for about two-thirds of the market capitalization of China's 1,200-plus listed companies.

Investors are wary of the plan, despite Chinese official assurances. On Thursday, Li Rongrong, chief of the State-owned Assets Supervision and Administration Commission, was quoted in the official Securities Times as saying that the government will not float all of its non-tradable state-owned shares on the market.

"With the development of the market economy, state-owned companies still need to maintain the leading status" in the economy, Li said, according to AFX-Asia. Li didn't provide details on how many shares the government will sell.

Australia's S&P/ASX 200 index was up 0.3%

South Korea's Kospi index was up 0.2%. Market leader Samsung Electronics (SSNGY: news, chart, profile) was up 1.2%.

As expected, the Bank of Korea's monetary policy committee kept its benchmark call rate target for May unchanged Thursday, at an all-time low 3.25%. The central bank has held policy steady for six months, after its 25 basis point cut last November.

Taiwan's Taiex index was down 0.1%, and Hong Kong's Hang Seng opened higher.

The dollar was trading at 106.08 yen, compared to 105.73 yen in late U.S. trading Wednesday. See Currencies.

On Wednesday, the Dow Jones Industrial Average ($INDU: news, chart, profile) closed up 19.14 points, or 0.2%, at 10,300.25, while the Nasdaq Composite Index ($COMPQ: news, chart, profile) rose 8.78 points, or 0.5% to 1,971.55.

[HenryTo]

It is amazing how a country with a booming economy can have a stock market that is making six-year lows day in and day out. It all comes down to the lack of confidence in China's financial markets. Look at all the Chinese IPOs that are being done in the U.S... or Hong Kong. Somehow, the rise of the Chinese Renminbi is not obvious to me if the Chinese government does away with the peg tomorrow. An initial pop definitely but I bet a lot of sophisticated investors will probably diversify into another currency if given the chance (that is, no restrictions on capital flight).

[pete richardson]

SSEC is classic textbook brear chart...Oversold? Sure, but look at that pattern:

http://stockcharts.com/def/servlet/SC.web?c=$SSEC,uu[m,a]waolyyay[df][pb13!b40][vc60][iUb10!La6,13,9]&pref=G