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BIZCHINA / Center
Market climbs despite rate rise
By Jin Jing (China Daily)
Updated: 2007-09-18 10:54
Investors monitor?stock prices at a securities?company in Jinan, Shandong
Province, September 17, 2007. China's major stock?index surged to a
new?record on Monday,despite an interest rate hike announced?last Friday.
[China Daily]?
"The things that are worrying the central bank are asset prices and the
potential for bubbles, and the inflationary consequences of asset price
inflation," said Stephen Green, an economist at Standard Chartered Bank.
The Shanghai Composite Index has already surged 102.6 percent since the
beginning of this year, and the average price-earnings ratio of A shares
is as high as 43 times, a jump of 44 percent from the start of the year,
according to TX Investment Consulting Co ltd.
Shang Fulin, chairman of the China Securities Regulatory Commission,
recently cited stock market "abnormalities" to illustrate the
"accumulated" risk that has long been ignored by investors.
The government has taken many financial measures to mop up liquidity this
year, including issuing 150 billion yuan worth of treasury bonds,
speeding up the return of red chips to the mainland, and a pilot scheme
to allow mainlanders to invest in the Hong Kong market.
We are waiting for the 17th National Congress of the Communist Party of
China to see what the government will do to fight inflation, and the
stock market may respond to that," said Zhu.
(For more biz stories, please visit Industry Updates)
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