Center

Investors want to keep the bull market rational

(Xinhua)
Updated: 2007-03-07 11:29

This year, about 1.38 million A share accounts were opened in Shanghai and Shenzhen in January. Over 100,000 new accounts were opened each day on the first four trading days after the Lunar New Year.

Cao Yuanzheng, an economist with BOC International Holdings Limited, said equity division has made the market a more attractive place to independent investors. Chinese households' rising disposable income also contributed to last year's booming market.

However, some analysts are concerned about stock market fever, arguing that many Chinese shares are overvalued and the bubble could burst at any time.

Liu Jipeng, a renowned stock commentator and professor with China University of Political Science and Law, said last week's fall was an internal adjustment that had occurred without any political or government interference. "It was a risk management lesson for new investors and is good for the stock market in the long run."

Premier Wen Jiabao pledged in his work report on March 5 that China will further strengthen basic market systems, continue to reforms systems for issuing stocks and bonds to make them more responsive to market conditions, raise the quality of listed companies and strengthen market supervision.

For the government, establishing a mature, modern capital market is a key task.

Li Xiaowei didn't expect any favorable policies to emerge from the Session. "The policy environment is already very good, but I do hope the session can announce some good news that will delight the markets and make the index rise further."

"If Government administrations adopt effective measures to ward off speculation and ensure transparency and justice, then we will have a rational and prosperous bull market," Li added.