Who can save Chinese stock market?

Who can save Chinese stock market?
Feb 2, 2008 01:10
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: offline	Just as the extream weather, Chinese stock market was hit by a serious disaster too. The total market value of Shanghai and Shenzhen Stock Exchange has been reduced 6 trillion yuan since January 15. Some analysts say that the drastic plunge in Chinese stock market was caused by US subprime credit crisis. Is this true? After US Fed cut the interest rates by 125 points, US share market rose quickly. To stimulate stock market, Hong Kong authorities also declared to cut the interest rates by 50 points and the shares was also increasing. Let's see how Chinese A share market reacted. No matter US stock market rises or goes down, Chinese A shares is just keeping plunging. Therefore, an economist suggests that the government should stop its tightening policies, decrease stamp tax and issue new funds to stimulate the market. Otherwise, a greater disaster will land on Chinese stock market. Will the government change its tightening policies? Will the stock market regain confidence? What do you think? "Who can save Chinese stock market?" The Chinese stock market was also freezed by the snow storms.

Feb 2, 2008 01:10

DREAMLIFE
Points:
Join Date: Sep 5, 2007
Status: offline

Just as the extream weather, Chinese stock market was hit by a serious disaster too. The total market value of Shanghai and Shenzhen Stock Exchange has been reduced 6 trillion yuan since January 15. Some analysts say that the drastic plunge in Chinese stock market was caused by US subprime credit crisis. Is this true?

After US Fed cut the interest rates by 125 points, US share market rose quickly. To stimulate stock market, Hong Kong authorities also declared to cut the interest rates by 50 points and the shares was also increasing. Let's see how Chinese A share market reacted. No matter US stock market rises or goes down, Chinese A shares is just keeping plunging. Therefore, an economist suggests that the government should stop its tightening policies, decrease stamp tax and issue new funds to stimulate the market. Otherwise, a greater disaster will land on Chinese stock market.

Will the government change its tightening policies? Will the stock market regain confidence? What do you think?

"Who can save Chinese stock market?" The Chinese stock market was also freezed by the snow storms.

Feb 3, 2008 09:10

APAULT
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Join Date: Mar 11, 2006
Status: Offline

Most of the sales were from short term speculators and those who had borrowed money to buy shares. 99% of shares were NOT traded. The Chinese economy is still sound but overheated so that there are too many buyers chasing limited resources which is causing inflation and general inefficiency. Any slowing in the world will reduce the overheating in the Chinese economy but not bring it to a halt. Buy quality shares now that they are a little cheaper and keep them.

Feb 4, 2008 19:55

JIMMYB
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Join Date: Feb 7, 2007
Status: Offline

"Any slowing in the world will reduce the overheating in the Chinese economy but not bring it to a halt. Buy quality shares now that they are a little cheaper and keep them."

Paul, I am with you. But many investors are incapable of choosing quality shares and they are not persistent. Once shares drop drastically, they sell what they hold because they are afraid of losing money. Perhaps, that is why they can't make money.

Feb 11, 2008 12:48	#3
APAULT Points: Join Date: Mar 11, 2006 Status: Offline	If they cannot choose quality shares or if they are going to panic when prices drop (or they have borrowed money) they should not participate in the stock market. Instead they should buy managed funds/unit trusts. I know this is an area that is only just emerging in China, but it substantially reduces the risks and bought long term, most people will find themselves ahead.

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