The benchmark Shanghai composite index, which tracks both A and B shares, climbed 1.878 points, or 0.13 percent, to 1,413.597 points. Shenzhen's lost 2.48 points, or 0.09 percent, to close at 2865.94.

Shanghai's hard-currency B share index rose 0.12 percent to end at 120.498 points, while Shenzhen's B share index inched up 0.02 percent to 196.49. Foreign investors are only allowed to buy B shares.

A shares in Zhuzhou Times, a maker of materials for train tracks, closed at 15.37 yuan (US$1.86) each after their first day of trade on the Shanghai exchange, more than double an initial public offering price of 6.60 yuan (79.8 US cents).

Domestic IPOs often double on debut as they are usually priced artificially low to ensure strong investor interest. And there is no limit on the maximum rise or fall on a stock's first trading day.

Punters also bought ST China Textile Machinery Co on news it had a new largest shareholder.

China Textile surged near its 5 percent daily limit to 9.92 yuan (US$1.20) on the yuan-denominated A share market.

China Textile said on Wednesday that Jiangsu Nanda High-tech Investment Co would buy 100 million State-owned shares from the listed company's parent firm, Shanghai Electric (Group) Corp.

"Investors accumulated this firm on a bet it would have a better chance of an asset restructuring after the deal," said an senior analyst at Orient Securities.

Brokers said investors remained cautious in a 19-month market downturn due to negative factors such as poor corporate earnings and an extended crackdown on market corruption.

Electronic products maker Shanghai CITIC-Jiading Industry Co, for example, fell on the news it would have to repay 27.2 million yuan (US$3.3 million) in debt.

CITIC-Jiading Industry was the biggest A share decliner in Shanghai, sliding by its 5 percent limit to 8.89 yuan (US$1.07).

Another breaking news on yesterday's market is that Credit Lyonnais Securities Asia has won approval for a 500-million-yuan (US$60.4 million) brokerage venture with China's Xiangcai Securities. It is the first of its kind under WTO commitments.

CLSA, a unit of France's largest bank Credit Lyonnais, would own 33 percent of the venture, the maximum stake allowed under rules issued after China joined the World Trade Organization in December 2001.

Xiangcai will hold 67 percent of the venture, which will focus on underwriting China's yuan-denominated A shares, to be called China Euro Securities Ltd.

"The main thing is still underwriting A shares," said Rob Morrison, HK-based chief executive officer of CLSA. "Although markets have been quiet, there's no reason why going forward there won't be a large market as well."

BNP Paribas is also hoping to set up a joint venture brokerage to tap China's US$500 billion A share markets, which rival Hong Kong as Asia's second largest.

"The Xiangcai and CLSA venture is the first we approved after issuing rules allowing the establishment of such ventures," said a spokeswoman for the China Securities Regulatory Commission.

CLSA is one of the most active traders on China's US$11 billion B share markets.

Morrison said he expected China to allow caps on foreign stakes in joint venture brokerages to rise to 49 per cent three years after China joined the WTO.

Regulators have encouraged Sino-foreign partnerships, well aware that embattled home grown brokerages lag their foreign counterparts in capital, experience and overall expertise.

(China Daily December 20, 2002)