Fundamentals of China's stock market still favourable
Tuesday, 5 June 2007
SHANGHAI, June 4 (AFP): The fundamentals of China's stock markets remain favourable despite recent falls triggered by the hike of a key tax on share trading, major state-run securities newspapers said in editorials today.
"The adjustment in the securities trading stamp tax is just a ripple in the markets and it will not change the positive and stable development trend. The policy has changed but the trend does not," the Shanghai Securities News said.
"There is no reason not to be optimistic about the mid- and long-term development trend of China's capital market," it said in the editorial.
It said the authorities had no intention of hurting the market, which would continue to benefit from many factors including high-speed economic growth, appreciation of the yuan and strong demand to invest personal savings.
China's stock markets have swung wildly since Wednesday after the government hiked the stamp duty to 0.3 per cent from 0.1 per cent in its latest effort to curb the nation's booming stock markets.
"The aim is to avoid greater systemic risks through appropriate tuning in advance," the China Securities Journal, another official business newspaper, said in a similar editorial, referring to the increase of stamp duty.
"The correction for the phase is not changing the fundamentals of the bullish market ... The bull run needs consolidation."
Chinese stocks closed down 4.59 per cent in morning trade Monday. Wednesday last week, they dropped 6.5 per cent for the steepest single-session fall in three months after the announcement of the tax.
"The editorials indicated the government did not want to see a sharp fall," said Lu Fangxing with Hualin Securities.
"The slump were beyond regulators' expectation. The authorities just hope to curb speculative sentiment. They did not expect the policy would hit the market so hard. I guess they are watching the market even more closely than investors."
"The adjustment in the securities trading stamp tax is just a ripple in the markets and it will not change the positive and stable development trend. The policy has changed but the trend does not," the Shanghai Securities News said.
"There is no reason not to be optimistic about the mid- and long-term development trend of China's capital market," it said in the editorial.
It said the authorities had no intention of hurting the market, which would continue to benefit from many factors including high-speed economic growth, appreciation of the yuan and strong demand to invest personal savings.
China's stock markets have swung wildly since Wednesday after the government hiked the stamp duty to 0.3 per cent from 0.1 per cent in its latest effort to curb the nation's booming stock markets.
"The aim is to avoid greater systemic risks through appropriate tuning in advance," the China Securities Journal, another official business newspaper, said in a similar editorial, referring to the increase of stamp duty.
"The correction for the phase is not changing the fundamentals of the bullish market ... The bull run needs consolidation."
Chinese stocks closed down 4.59 per cent in morning trade Monday. Wednesday last week, they dropped 6.5 per cent for the steepest single-session fall in three months after the announcement of the tax.
"The editorials indicated the government did not want to see a sharp fall," said Lu Fangxing with Hualin Securities.
"The slump were beyond regulators' expectation. The authorities just hope to curb speculative sentiment. They did not expect the policy would hit the market so hard. I guess they are watching the market even more closely than investors."