Stocks down in response to macroeconomic data
Updated: 2007-07-19 16:16
According to the National Bureau of Statistics (NBS), China's gross domestic product grew 11.5 percent to 10,676.8 billion yuan in the first half. The growth rate was 0.5 percentage point higher than that of the same period last year, reported NBS in a press conference this morning. Trade surplus was 112.5 billion yuan for the first half.
On the other hand, CPI, a key indicator for inflation, rose 4.4 percent last month and 3.2 percent for the past six months. Food price was the largest CPI driver, according to NBS. Analysts believe the central bank may raise interest rate again this month to curb excessive liquidity and cool down the investment wave.
However, experts also said the impact to the stock market of further tightening monetary measures will be limited. According to a research program by the First Financial News, 90 percent of over 100 economists from government bodies, research centers, universities and financial institutions they've surveyed believed the domestic A-share market may hit the 4,336-point record on May 29.
Of the economists, 19.5 percent believe the Shanghai Composite Index will break through 5,000-mark by the end of the year; 23.9 percent of them see it at between 4,500 to 5,000 point; 26.8 percent forecast something higher than the previous record but below 4,500; while 9.8 percent said the stocks will not return to the pre-May 29 level.
The China Securities Regulatory Commission is now preparing a series of new regulations to better regulate the capital market and maintain healthy and stable development of China's financial industry. The total 26 new rules include a draft futures law, an act on supervision over securities companies and a risk control rule for such firms. Some of the rules have been submitted to the State Council for approval, said the securities regulator.
The insurance regulator is also releasing restrictions on insurer's stock investment. Recently the China Insurance Regulatory Commission raised the cap of direct stock investment by insurance companies from 5 percent to 10 percent.
Sources said that insurers were also allowed to invest in ST stocks - "specially treated" companies that have been marking loss for consecutive three years, and blue chips that have grown over 100 percent over the past 12 months.
Next week the market will see another listing wave as seven new stocks are introduced, after four companies, including Bank of Nanjing and Bank of Ningbo, raised a record higher of 2 billion yuan in last weeks initial public offerings. The stocks, including Zhejiang Hongda Warp Knitting, will issue a total of 234.6 million shares on Monday, Tuesday and Thursday next week.
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