China shouldn't lower the stamp tax for stock trading?

China shouldn't lower the stamp tax for stock trading?
Apr 30, 2008 04:02
JIMMYB Points: Join Date: Feb 7, 2007 Status: offline	After the government lowered the stamp tax for stock trading, Chinese stock market seems reviving again. Both Shanghai Composite Index and Shenzhen Component Index have surged. However, some people say that the surge can't last for long and the slump will reappear. According to Morgan Stanley, stamp tax cut for stock trading shows that the government has compromised with the speculators though it can stimulate the market. At the same time, the speculation in A share market might be more triumphant because the stock transferring fee is cheaper now. Except lowering the stamp tax for stock transferring, it seems that China has no other ways. What do you think? Will the market perform as some people predict, surging first and then slumping?

Apr 30, 2008 04:02

JIMMYB
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Join Date: Feb 7, 2007
Status: offline

After the government lowered the stamp tax for stock trading, Chinese stock market seems reviving again. Both Shanghai Composite Index and Shenzhen Component Index have surged. However, some people say that the surge can't last for long and the slump will reappear. According to Morgan Stanley, stamp tax cut for stock trading shows that the government has compromised with the speculators though it can stimulate the market. At the same time, the speculation in A share market might be more triumphant because the stock transferring fee is cheaper now. Except lowering the stamp tax for stock transferring, it seems that China has no other ways.

What do you think? Will the market perform as some people predict, surging first and then slumping?

Apr 30, 2008 22:36

MARRIE
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Join Date: Jan 7, 2008
Status: Offline

i saw somebody's tax returns with million of capital gain with half of them taxed, in another word, gains from stock market are taxed at much lower margin rate than interests from savings. this encourage investment in long run because frequent short term trading costs offset gains assuming you are retail investor. I have doubt that this news will stimulate market. However, in reality this news most probably stimulates greed hidden in almost everybody in the market where most participants are chasing the dream of millions of gain just via clicking away on the trading software no matter how high the expenses are and how low the probability is . this is human nature and stock market never dies.

May 4, 2008 20:33	#2
GUEST6106	"I have doubt that this news will stimulate market." Marrie, why did you have doubt? After the stamp tax on stock transferring was lowered, the stocks have been surging fast. Anyway, this move has taken effect.

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