Bank shares lift Shanghai index to new high
Updated: 2007-09-06 16:25
The benchmark Shanghai Composite Index grew 18 percent and the total market value of all securities listed in the two stock exchanges rose 17 percent in August alone. The capital available for A-share trading exceeded 1.3 trillion yuan at the end of August, signaling continued investor confidence in China's stock markets.
That figure was approximately 30 percent higher than the level three months earlier. It included a monthly record of 220 billion yuan that became available for stock trading in August, according to a monthly report.
The rapid-growing influence of the domestic stock market reflects China's economic growth and the development of its capital market. However, the country is also concerned about its safety and stability. A series of government measures are in the pipeline, intended to better protect investor interests and the health of the market.
The China Securities Regulatory Commission (CSRC) has kicked off a trial operation based on two new rules against insider trading and price manipulation. The new rules defining insider trading and price rigging by listed companies help the regulators detect and clarify such illegal conducts and provide a foundation for the law-enforcement activities, said Fan Fuchun, vice chairman of CSRC.
On the other hand, sources with the regulators said yesterday that a detailed plan to allow mainland investors to buy Hong Kong stocks may be unveiled within two months. The H-share investment program is expected to be launched in Tianjin, Beijing, Shanghai and Guangzhou by branches of Bank of China, the Industrial and Commercial Bank of China and China Construction Bank in those cities. The minimum capital amount required to open such an account could be raised to 300,000 yuan, said the sources.
Analysts believe such a delay after the foreign exchange and securities regulator announced a trial program in Tianjin last month is a necessary step in preventing hasty investment by mainland investors and slowing the "shocking" capital outflow from the mainland market. Also, the government could use the period to develop a series of rules and an investor protection mechanism to guarantee a gradual and smooth "open-up" of the capital market.
CSRC chairman Shang Fulin said today at a forum in Davos that the preparation work for China's first financial futures is ready and China may launch the index futures based on the CSI300 when the time is right. Shang said the regulators and brokers have so far overcome policy and technical difficulties. After investors are well educated, conditions will be ripe to launch the index futures derivatives, Shang said.
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