BIZCHINA / Center
Donald Tsang supports cross-border trading
(chinadaily.com.cn)
Updated: 2007-06-19 14:56
Donald Tsang, Chief Executi
BIZCHINA / News
Inflation hits 27-month high with CPI up 3.4%
By Dong Zhixin (chinadaily.com.cn)
Updated: 2007-06-12 10:42
A vendor arranges watermelons at a market in Nanjing, East China's
Jiangsu Province, June 12, 2007. Surging food prices boosted China's
annual consumer price inflation to a 27-month high of 3.4 percent in May
from 3.0 percent in April, the National Bureau of Statistics said on
Tuesday. [Reuters]
On the timing of the next rates hike, some analysts expect it to happen
before late June as CPI has been hovering at or above three percent for
several months.
However, Shenyin Wanguo Securities chief analyst Gui Haoming put the
timeframe in July or August. The central bank raised the interest rates
just in mid-may and it usually will wait some time to see the feedback
before another move, making rates hike in June unlikely, Gui explained.
Qiu Yanying of TX Investment Consulting Co. echoed Gui's points. Qiu
expected the central bank to wait until next month's CPI is released
before deciding on further interest rates hike.
Stock market
The analysts are divided on the impact of an interest rate rise on the
stock market, which is gradually recovering after a series of slumps
caused by the stamp tax hike announced on May 29.
The influence on the equity market will be limited, as an interest rates
hike was expected, said Gui Haoming.
However, other analysts thought the market is currently at a sensitive
period and an increase in interest rates will probably result in wilder
fluctuation. They also pointed to the weak performances of banking stocks
in the last few days, which they said was caused by expectation of a
rates hike.
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ve of the Hong Kong Special Administrative
Region said in a recent interview that he supports exchanges in Shanghai
and Hong Kong trading stocks listed on each other's markets. Relevant
issues are under negotiation, he said.
Tsang is the highest official who publicly supports the cross-border
share trading plan and confirms its on-going negotiation.
Related readings:
HK market turnover tops HK$100b for 1st time
Mainland tops HK in stock market value
Shanghai market IPOs may beat Hong Hong
A source close to the securities regulator told the Shanghai-based
Oriental Morning Post that at present, regulators are encouraging Hong
Kong-listed companies to make public offerings in the mainland market.
Other than that, issuing a China Depositary Receipt is thought to be a
feasible way to achieve cross-border trading.
Insiders believe that cross-border trading may face problems of
settlement or foreign exchange control, and so it will be hard to achieve
in the short term.
Professor Hua Sheng, head of Yanjing Overseas Chinese University, said
the adoption of cross-border trading might divert arbitrage fund to the
relatively cheaper Hong Kong market from the Shanghai and Shenzhen
bourses. But in the long run, it could help squeeze bubbles in the
mainland market and is conducive to the healthy development of China's
A-share market.
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