Mainland stock market slumped yesterday

Mainland stock market slumped yesterday
Feb 25, 2008 22:10
ZOEY Points: Join Date: Nov 29, 2004 Status: offline	Yesterday, Shanghai Stock Exchange suffered a serious slump. The composite index fell about 4.1 percent to 4,192.53. Compared with the high record in last Oct., it declined 31.5 percent. The turnover in A share market shrank to 93 billion yuan. Affected by this, the Hang Seng went down 0.2 percent and H-shares declined 1 percent. It is said that some big shares will be issued in the near future. Those investors are afraid that the liquidity will be restrained a lot by it. Some people analysed that the suffer had something to do with the central bank. Not long ago, the central bank decided to reduce the money supply to curb the inflation that is the hightest in recent 11 years.

Feb 25, 2008 22:10

ZOEY
Points:
Join Date: Nov 29, 2004
Status: offline

Yesterday, Shanghai Stock Exchange suffered a serious slump. The composite index fell about 4.1 percent to 4,192.53. Compared with the high record in last Oct., it declined 31.5 percent. The turnover in A share market shrank to 93 billion yuan. Affected by this, the Hang Seng went down 0.2 percent and H-shares declined 1 percent. It is said that some big shares will be issued in the near future. Those investors are afraid that the liquidity will be restrained a lot by it. Some people analysed that the suffer had something to do with the central bank. Not long ago, the central bank decided to reduce the money supply to curb the inflation that is the hightest in recent 11 years.

Feb 26, 2008 17:25

ERENCIUS
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Join Date: Aug 26, 2007
Status: Offline

Quote:
"Not long ago, the central bank decided to reduce the money supply to curb the inflation that is the hightest in recent 11 years."

I don't think it is the right way to reduce the Inflation in the current Chinese situation. Better implement a stop and go policy : increasing interest rates pushing people to save money rather than to borrow. I guess soon the Chinese economy will be overheating. Better slow it down a bit and then let it grow at a steady pace. This is just my point of view though ;-).

Feb 26, 2008 20:34

JIMMYB
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Join Date: Feb 7, 2007
Status: Offline

Well, it seems that interest rates increase didn't take much effect to curb the inflation. Facing inflation and high CPI, China has taken two ways: increasing interest rates or reserve ratio. But both didn't make good result. The CPI in January has increased 7.1 percent due to the snow attack. Some people estimate that China might increase the interest rates again to curb the skyrocketing CPI and inflation. Let's wait and see.

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