BEIJING, June 26 -- Shanghai shares may edge up this week as some of the funds that were eying shares of Bank of China Ltd are expected to flow back into the market chasing other equities.

The Shanghai Composite Index, which covers yuan-denominated A shares and hard-currency B chips, gained 1.97 percent to close last week at 1,605.71. It has climbed 38 percent so far this year.

Bank of China, the country's second-biggest lender by assets, on Friday allowed applications by retail investors to buy its shares in Shanghai after pricing its Chinese mainland offer at 3.08 yuan (39 US cents) apiece.

The Beijing-based lender planned to sell 6.49 million A shares to raise 20 billion yuan in the biggest mainland initial public offering, with the retail tranche accounting for 48 percent of the flotation.

The coming IPO may have frozen at least 600 billion yuan of minority investors' funds in subscriptions for the shares. But more than 500 billion yuan is set to return to investors without stock allotment tomorrow.

"I expect some of these funds that were originally eying the bank's IPO to flow back into the market chasing other stocks," said Liu Yu, an Orient Securities Co trader. "Besides, companies that have predicted half-year profit are likely to be sought after (by investors)."

Among China's 1,300 or so listed companies in Shanghai and Shenzhen, 77 firms have said they expect a profit growth of more than 50 percent in the first six months, while 55 enterprises have estimated they might swing from a loss to a profit during the period, according to Beijing Shoufang Investment Consulting Co.

The Beijing-based consulting firm expects the benchmark index to move in a range between 1,570 and 1,630 this week.

It advised investors to train their sights on consumer-related stocks in the medium term, which tend to benefit from China's blistering economic growth and growing consumer power, according to a research note issued over the weekend.

(Source: Shanghai Daily)