What do you think of the rumours?

What do you think of the rumours?
Aug 27, 2008 04:23
JIMMYB Points: Join Date: Feb 7, 2007 Status: offline	Recently, some rumours have said that the government will do something to rescue the stock market. Last week J.P.Morgan said that Chinese authorities might consider an 200 billion to 400 billion yuan ($33 billion-$67 billion) economic stimulus package to cheer up China's economy. As for the stock market, another rumour says that the government will invest a chunk of its near US$2 trillion of foreign reserves in A-shares to rescue the market. Encouraged by this, Chinese shares increased on August 20th. However, Merrill Lynch doesn't agree with J.P. Morgan. It says that these rumours are groundless. Merrill Lynch thinks that Chinese authorites won't invest its huge amount of foreign reserves in A-shares. What do you think of the rumours? Will China use its foreign reserves to rescue the market?

Aug 27, 2008 04:23

JIMMYB
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Join Date: Feb 7, 2007
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Recently, some rumours have said that the government will do something to rescue the stock market. Last week J.P.Morgan said that Chinese authorities might consider an 200 billion to 400 billion yuan ($33 billion-$67 billion) economic stimulus package to cheer up China's economy. As for the stock market, another rumour says that the government will invest a chunk of its near US$2 trillion of foreign reserves in A-shares to rescue the market. Encouraged by this, Chinese shares increased on August 20th.

However, Merrill Lynch doesn't agree with J.P. Morgan. It says that these rumours are groundless. Merrill Lynch thinks that Chinese authorites won't invest its huge amount of foreign reserves in A-shares.

What do you think of the rumours? Will China use its foreign reserves to rescue the market?

Aug 27, 2008 05:24

APAULT
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Join Date: Mar 11, 2006
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Not a chance! It might use reserves to boost the economy which in turn will boost shares, but why should it support the stock market? The whole point about a stock market is that the market should determine the value and price of a stock. Who is losing out at the moment? people with enough money to invest. If they are true investors they will make plenty of money in the long run. If they are short term investors they are just gamblers. You know, China superficially bans gambling but allows short term speculation on the stock market - just anopther form of gambling. Behind it all the Chinese economy is strong. The world economy is strong even though it has a few issues. long term investments in good solid companies instead of speculative buys hoping for get rich quick gains will pay off handsomely.

Aug 27, 2008 22:35

MARRIE
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Join Date: Jan 7, 2008
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Jimmy, it's an explosion news that A share is in USD?

China is a growing boy and its economy strategy adops stop-go mode instead of shock therapy. Olympic Game is a mile stone, after that, the question of which way to go and how to approach is becoming more complicated and tougher.

46 billion USD expenditure in the game and frequent underlying huge amount of gov. controlled cash flow in small scale capital market means we are in the teenager stage.

Aug 28, 2008 20:11

JIMMYB
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Marrie, A share is definitely not in USD. The market seems to be down to its bottom. The shares of Amoi Electronics Co.,Ltd has dropped to 2 yuan. Some people say that it will soon slump to 1 yuan.

"Olympic Game is a mile stone, after that, the question of which way to go and how to approach is becoming more complicated and tougher."

Totally agree. It is said that Chinese economy will enter its short-term downturn period. Just predication.

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