March 29, 2005

DIVISION OF LABOR:

Chinese shares in free fall (Asia Times, 3/29/05)

China's shares this week hit their lowest intra-day level in nearly six years due to a piling up of weak investor sentiment. The benchmark Shanghai composite index, which groups together foreign currency B shares and local currency A shares, slid 0.46% on Monday to close at 1,200.113 points after initially docking at 1,185.45 points at noon, 1.71 points lower than 1,187.26 - the previous record logged in May 1999.

Turnover in Shanghai hit 4.910 billion yuan (US$592 million), with the bourse's biggest loser - Dongfeng Technology - shedding 10.05% to close at 7.35 yuan. Analysts foresee more losses ahead with sentiment extremely weak after an unremitting share slump. Experts said the situation is the natural result of poor sentiment caused by the government's new economic cooling measures and the failure of regulators to take steps to solve the stock market's problems following the National People's Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC).

"The government has taken a series of steps, such as the housing loan rate increase, to cool the overheating economy. It's estimated that tougher ones will follow and the gross domestic product [GDP] this year will fall. Most investors have a pessimistic view of the market and are reluctant to trade amid this prevalently weak sentiment," said Wang Kai, a manager from the Investment Research Department of China Securities Co.


Still folks wonder why they're so eager to buy our securities...

Posted by Orrin Judd at March 29, 2005 7:40 AM
Comments

From page 1 of the Journal today:

"China's fifth-largest lender received a $362.5 million capital injection last year from a shareholder controlled by the country's foreign-exchange regulator".

In related news, Alan Greenspan's wife gave Wells Fargo $400 million to cover some bad checks. No word on whether it was a donation or a loan.

Posted by: ratbert at March 29, 2005 5:19 PM
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