BIZCHINA / News |
Lawmaker urges rational stock investment(Xinhua)Updated: 2007-02-07 10:17 Senior Chinese lawmaker Cheng Siwei has urged people to take a rational approach to stock investment decisions particularly in a bull market, according to Tuesday's Financial News. Cheng, vice chairman of the Standing Committee of China's National People's Congress, wrote to the newspaper a week after remarks he made - that were quoted by the Financial Times - were widely believed to have spurred a 7.2 percent tumble in the equity markets. "In a bull market, people invest irrationally. Every investor thinks they can win. But many will end up losing. But that is their risk and their choice," the Financial Times quoted Cheng as saying on January 31. Cheng responded in Tuesday's Financial News that the Financial Times reporter mistakenly used "will" instead of his original "could" and the translator did not capture the meaning of "end up" in the Chinese version. Cheng also wrote that investors should be wary of being misled by over-optimistic media reports about the share market and be especially cautious in stock trading now. He noted that there was much more irrational investment in a bull market than in a bear market and bubbles were more likely to develop. He also urged listed companies, not only the heavyweights, to lift their profitability so as to provide a solid basis for the healthy development of the stock markets. "The gradual and healthy development of the equity markets depends on an improved performance by listed companies," he wrote. He acknowledged that the government, as regulator, is not responsible for stock gains or losses, but should help to create a fairer, more open and transparent equity market to safeguard the legitimate interests of investors. A reasonable return for their investment was critical to investors' confidence in the stock market, he added. "As a prudent optimist, I believe the stock market will increase in the long run despite short-term fluctuations", he wrote. Chinese stocks ended the week-long slump on Tuesday, as the key Shanghai Composite index closed up 63.16 points, or 2.42 percent higher, at 2,675.70. (For more biz stories, please visit Industry Updates)
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