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1st LD-Writethru: China's stocks close lower on IPO concerns

Xinhua, May 15, 2015 Adjust font size:

Shares on the Shanghai and Shenzhen bourses closed lower on Friday as concerns of more initial public offerings (IPOs) in the pipeline grew.

The Shanghai Composite Index dipped 1.59 percent to close at 4,308.69 points, while the Shenzhen Component Index lost 2.19 percent to close at 14,694.95 points.

During Friday's trading, losers outnumbered winners by 635 to 293 in Shanghai and by 838 to 586 in Shenzhen.

Regulators claim the market has ample liquidity to handle more IPOs. Xiao Gang, head of the China Securities Regulatory Commission (CSRC), said on Friday that although approval has been speeded up in recent months with two batches of IPOs each month instead of one, the move is unlikely to change the trend of stock indexes, especially in a long-term prospect.

Acceleration of IPOs won't have a big effect on the domestic market, Xiao said.

The CSRC might approve the second batch for May around May 23, which may drive investors to sell some holdings to have cash in hand.

Agriculture, communication and transportation all gained while financials, futures, gas, insurance, oil and securities dipped.

Communications and computers drew strength from the cabinet's promise of faster broadband and lower Internet prices on Wednesday.

The ChiNext Index, tracking China's growth enterprises, reversed previous drops to edge up 0.12 percent to end at 3,145.34 points. The index shed 1.79 percent and 1.58 percent respectively on Wednesday and Thursday.

Over 50 shares on the board rose by daily limit of 10 percent on Friday, including Qtone Education, which has climbed nearly 1,000 percent in only 16 months to close at 233.75 yuan per share.

In contrast, online video company Baofeng Technology dipped 6.5 percent to close at 226 yuan per share on Friday. Its shares have risen more than 3,000 percent from an offer price of 7.14 yuan in March. Endi