A REAL BUBBLE:

Investor confidence shattered as China stock market goes from bad to worse (News Asia, 6/06/05)

The future of China's deeply troubled stock markets went from bad to worse this week, slumping to fresh eight-year lows as regulators' plans to solve the overhang of non-tradable government-owned shares heightened fears more losses lie ahead.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed at a fresh eight-year low Friday, down 2.43 points, or 0.24 percent, at 1,013.64.

It was the lowest close since February 24, 1997 after three consecutive sessions of losses that saw the composite trim 3.8 percent of its value.

Dealers said they expect the index to fall through the key technical mark of 1,000 points soon unless Beijing steps in with strong medicine to cure broken investor confidence.

"The market has been falling for years and investors are numb," said Zhang Qi, analyst from Haitong Securities.