The composite index of Shanghai Stock Exchange bounced up 3.13 points to close at 1,601.15 points after a day of fluctuations on Monday, the first day of trading since the central bank announced a rise in interest rates.

On Aug 18 the central bank hiked the one-year benchmark interest rate 0.27 of a percentage point. The news brought down the composite index by 1.68 percent to open at 1,565.457 points on Aug 21 morning trading. Interest rates stand at 2.52 percent on one-year deposits and 6.12 percent on the one-year loan rate, as set by the People's Bank of China (PBOC), or the central bank.

The central bank raised the loan rates by the same margin in late April, but did not change the deposit rates. The rise may have sparked fears of insufficient capital available for stock market players. A flurry of initial public offerings (IPOs) have investors concerned that capital could dry up and send the market tumbling.

On Aug 21, the China Securities Regulatory Commission (CSRC) started reviewing the IPO plans of Dalian Zhangdao Fishery Group, Zhejiang Dongliang New Material and Zhejiang Jiakang Electronics. The CSRC had not conducted IPO reviews for three weeks.

"Although the three are all small capitalizations, some investors may fear an IPO glut could cause liquidity pressure," Zhang Yidong, an analyst at Industrial Securities, said.

In June and July, after 10 companies including the state-owned Bank of China and the Daqin Railway, presented their IPOs on the mainland, the total market value of shares already listed on Chinese stock markets slumped by more than 400 billion yuan (50 billion U.S. dollars).

Most experts attending a recent high-level forum on China's capital market, however, expressed confidence in the Chinese stockmarket in the long run, expecting the A-share market to rebound in the fourth quarter after the recent short-term adjustment, with more investment opportunities to appear.

Source:佚名