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Thread: Can the government prop up the stock market?

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[quote=YVONNE,293546]As the source of the biggest initial public offerings, China is preparing to make China Construction Engineering Corporation, another blockbuster, go public. The news reports that China Construction Engineering Corporation's IPO is expected to raise about 6 billion dollars, which is China's fourth biggest IPO and the biggest in the world so far this year behind Visa of the US.

However, the market is different compared with that in last year. Last year, the Shanghai Composite Index of A shares nearly doubled and investors had taken about 150 percent profits from the stock market. This year, the index has fallen about 40 percent and the turnover per day has apparently reduced. At the same time, the authorities are trying to prop prices, for example, reduce the stamp tax on stock transferring. In April, the government had started to limit the sales of state-owned shares. Meanwhile, it has introduced activities such as margin lending to attract the investors' interest. However, the fund management companies have found that it is easy to attract the investors but hard to raise money.

What do you think Chinese governments' methods? Can it prop up the stock market?[/quote]

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