Stocks ladder up to higher ground
By Li Zengxin (chinadaily.com.cn)Updated: 2007-06-13 16:05
Investors are shrugging off the anticipation of tightening monetary measures by the central bank, as the stock prices kept growing in the last two days after the National Bureau of Statistics announced a 3.4 percent rise in the consumer price index (CPI) in May on yesterday.
The CPI figure well beat the three percent target set by the People's Bank of China for this year and triggered a new round of debates on the possibility of another interest rate hike. But even if the central bank decides to do so, said analysts, the stock market will not fall dramatically, as the interest rate instrument is not merely targeting the stocks but rather the overall economy.
The China Securities Regulatory Commission issued a draft rule governing corporate bond issuance for public opinions yesterday. The draft rule will allow listed companies in the two stock exchanges and domestic companies whose parents are listed overseas to issue corporate bonds in the mainland markets, if qualified for a set of requirements. If passed, the rule will offer a new financing channel for the companies and another investment tool for the investors, said analysts.
The heated stock market and the anticipation of inflation have made the bank savings less attractive to ordinary people. Chinese residence put less money into their savings accounts in May. According to the People's Bank of China, Chinese deposits dropped 278.4 billion yuan last Month, breaking the previous history of a 167.4 billion yuan in April.
By the end of May, balance of renminbi deposits at all financial institutions was 36.03 trillion yuan, up 14.63 percent year-on-year. But the growth rate was 1.03 percent down from April and 2.19 percent lower than that by the end of 2006. The 14.63 percent growth rate was the lowest since April 2002.
The resurgence of Chinese stocks in the past six trading days in a row has lifted some share prices back to the level before the stamp tax hike. By yesterday's closing, 257 stocks, accounting for 19.02 percent of all the stocks on the two exchanges, even exceeded their prices on May 29, when the stock index hit the 4,300 mark.
Of the 257 stocks, 37 companies in machinery and equipment manufacturing took the largest proportion, followed by those in non-ferrous metals and industrial chemicals. Growth in profits in the machinery and chemical industries and the price rises in the international market for metals make the three sectors the hotspot in the stock market.
Total market value of all securities listed on the two exchanges was 17.72 trillion yuan by yesterday's closing, close to the figure on May 30, the day following the stamp tax hike when the stocks plunged 6.5 percent.
The number of new A-share accounts opened on Monday came back to the 200,000 level, according to China Securities Depository and Clearing Co Ltd. There were 242,125 new investment accounts on June 11: 212,746 new A-share, 2,274 B-share and 27,105 fund accounts.
By June 11, there were 103.6 million investment accounts in the Chinese mainland, including 89.6 million A-share, 2.2 million B-share and 11.8 million fund accounts.
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