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Has the bear outstayed his welcome?

By Gao Changxin (China Daily)

08:32, August 09, 2012

Stock investors at a securities brokerage in Hangzhou, Zhejiang province, on Monday. (Photo/China Daily)

It's been five years since China's last bull market retreated in late 2007.

A lot has changed since then: a global financial crisis has come and gone, many eurozone countries are still struggling; the Chinese central bank has adjusted its benchmark interest rates more than a dozen times.

But despite all this, and more, China's main stock index - the Shanghai Composite Index - at 2157.62 points at Tuesday's close, has been largely unmoved.

In China, up to 85 percent of A-share market capitalization is in the hands of individual investors, according to China Securities Regulatory Commission, the country's top securities regulator.

Many of those investors suffered the most painful losses when the country's major stock index plummeted from more than 6000 points to 2000 points in just a few months in 2007 and 2008.

Their clamor and anticipation have increased in recent months, with the introduction of various pro-growth policies that were expected to add market liquidity.

Many said they have waited long enough for the bull to return.

"The stock market has been miserable for so long that it's time that the government do something to shore up the market," said Liu Liyang, a shop assistant in Shanghai who suffered "great losses" in the dark days of 2008.

Analysts said it is certainly reasonable for investors to have become impatient.

After the People's Bank of China, the central bank, cut the benchmark lending and savings rates for the second time in a month on July 6, many expected that easier credit would boost the stock market.

Economist consensus is that the GDP growth will bounce back in the second half after hitting a three-year low in the second quarter.

Experts have suggested that as a precursor for a return to a stronger economy, the stock market will be a beneficiary of rising investor confidence.

"All the recent news points to a stronger stock market, which should see a rally sooner or later in the second half," said Li Daxiao, director of Yingda Securities Institute, in a message on his micro blog.

However, the Shanghai Composite Index has been down 2.97 percent this month, and 1.90 percent year-to-date.

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