China stocks fall as IPO burst raises liquidity concerns; HK also down

lunes 9 de marzo de 2015 00:45 GYT

* CSI300 -1.3 pct; SSEC -0.9 pct; HSI -0.8 pct

* Most Shenzhen stocks up on expectations of SZ-HK Connect

* Brokerages slump on fears of intensified competition

SHANGHAI, March 9 (Reuters) - China stocks sank on Monday morning amid worries over tighter liquidity as 23 companies are poised to sell shares publicly this week, potentially locking over 3 trillion yuan ($478.84 billion) of capital.

The decline was led by brokerages, which slumped after China's securities regulator said it is considering issuing brokerages licenses to banks, a move that will intensify competition.

But Shenzhen's ChiNext, the Nasdaq-style board for high-growth start-ups, resumed its upward momentum, rising 1.5 percent as investors shift money out of bluechips into small plays, despite their lofty valuation.

"You cannot just look at price-earning ratios; you need to look at growth," said David Dai, Shanghai-based investment director at Nanhai Fund Management Co Ltd.

ChiNext currently trades at around 80 time companies' earnings, much higher than the average P/E ratio of 16.2 in Shanghai and 39.5 in Shenzhen, but Dai believes high growth will cut down ChiNext's valuation over time.

He xpects this week's flood of initial public offerings (IPOs) would put downward pressure on stocks, both big and small.   Continuación...