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|Monday, September 10, 2001, updated at 21:22(GMT+8)|
Morgan Stanley: China's Stock Market has One Trillion Dollars Potential GrowthChina's total stock market cap is expected to top at least 1.5 trillion U.S. dollars by 2010 from the present 500 billion U.S. dollars, said Morgan Stanley's managing director Michael Berchtold Monday.
Berchtold, in charge of Morgan Stanley's Asia-Pacific investment banking, made the remark at the International Conference on Corporate Governance for Chinese Listed Companies, which opened here Monday.
With a 3-trillion-U.S. dollar forecast for China's gross domestic product (GDP) for 2010, its stock market cap could grow to reach the huge number mentioned above, Berchtold said.
In developed markets, the stock market cap usually accounts for 50 to 150 percent of the country's GDP.
And the domestic capital needs will also be sizable in the next ten years, he added. The amount of funds to be raised from the stock market will total at least 750 billion U.S. dollars in the coming ten years, 200 billion of which may come from abroad.
However, China still needs to improve the regulatory framework of its stock market, including strengthening existing rules and regulations, better enforcing those already in place and punishing offenders appropriately, Berchtold said.
"China has to show investors, domestic and international, that it is serious about adopting the best practices globally in terms of regulations, implementation and enforcement," Berchtold said.
More institutional investors with great professionalism and listed companies with good governance will also help the local stock market, he said.
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