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China Sees Bullish Stock Market in First Half Year
China has seen a bullish stock market in the first half of this year, with stock indices' turnover repeatedly hitting new highs.
The Composite Stock Index on the Shanghai Stock Exchange started at 1,366.58 points at the beginning of the year and closed at 1,928.11 points on June 30, gaining 41 percent.
The Component Stock Exchange on the Shenzhen bourse edged up 43 percent from 3,369.61 points to 4,830.67 points.
The record high for the two indices is 1,953.34 points and 4,875.05 points, respectively.
The two bourses reported a total turnover of 3.47 trillion yuan (US$418 billion) in the first six months, which is 12 percent higher than the turnover in 1999.
Internet, steel and petroleum stocks have been investor favorites. In the six months, prices of 91 stocks doubled, and Yi An Tech became the first stock in China ever to hit the threshold of 100 yuan.
The gloomy B share market also saw a rare rally in May. In a period of two weeks, the Shanghai B share index gained 37 percent to hit a record 58 points, in addition to an all time high turnover of 370 million yuan (US$44.6 million).
The bullish market has clearly attracted more investors. In mid-June, the number of investors with accounts in the two bourses increased to 50 million, or 10 million more than a year ago.
In the first six months, 50 new stocks were listed on the two bourses, making the total number of listed stocks to 1,081, including 973 A share stocks and 108 B share stocks.
Securities analysts in Beijing said the bullish market is a reflection of the positive changes in China's macroeconomic situation.
They cited growth in gross national product, social retail sales and other key economic indices as proof that the country's economy has emerged from its slump and is moving into a new period of prosperity.
Chinese Premier Zhu Rongji seems to share that view. He claimed recently that the Chinese economy has moved out of the shadow of the Asian financial crisis and is entering a benign cycle.
The market regulators' new policies such as allotment to secondary market investors in new stock issuance, allowing insurance companies buying mutual funds and mortgage loans for securities dealers, also helped boost the market, the analysts said.
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