Top Biz News

Fund continues despite market bloodletting

By Liu Jie (Xinhua)
Updated: 2007-03-01 16:50

Funds raised more than 400 billion yuan asretailinvestors shifted low-interest bank deposits into the mainland Chinese bourses, which surged by 130 percent last year after a four-year slump.

Thanks to the booming stock market, equity funds continued to lead the increase with a 15 percent gain in January.

Government has beefed up tightening measures such as ordering bank loans out of the stock investment to cool down the sizzling market whose record high surges was tempered with volatility.

CSRC halted sales of funds in late November to keep the market from overheating after stock values on theShanghaiand Shenzhen exchanges more than doubled since the start of 2006.

Officials and market regulators have been repeatedly reminding investors of the risks the markets bring. CSRC has asked each fund management companies to set up special education fund to make investors aware of the risks.

The awareness program which includes advertisements in various mass media aims to help investors understand their own financial circumstances, better understand markets, along with the development history of funds and fund management companies.

Average annual yields of equity funds have undergone huge fluctuations since 2002 and even lost 11.9 percent in 2004, according to the figures released by the Galaxies Securities.

Investors' buying spree however showed no signs of abating in the week-long Spring Festival holiday as people shared their trophies when visiting friends and relatives -- more than 100 percent yields in the past one year, an equivalent of 50 years of bank interests.

Some retail investors said they will not focus their attention on the short-term up-and-downs, but it is still tough for new buyers to act rationally amid the current boom.