China's stock market expected to see investment boost in lunar new year

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Last updated at: (Beijing Time) Monday, January 19, 2004

China's stock market expected to see investment boost in lunar new year

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Despite disagreements on analysisand interpretation of recent stock market performance, most Chinese market analysts predict an investment boost and investor confidence increase in the Chinese lunar new year.

China's stock market was undergoing a confidence-restoring process, said Zuo Xiaolei, chief analyst with China Galaxy Securities. She predicted that China's securities sector would undergo steady development in 2004 after three years of market readjustment.

"The institutional investor has become a major player since last year, especially with the participation of Qualified Foreign Institutional Investor (QFII), which is a landmark transition of China's stock market".

Circumstances have changed a lot, Zuo noted, adding that the establishment of an information release system and regulations against market manipulation and securities fraud, provided a substantial basis for the stable development of the market.

Chen Jijun, an analyst with China SITIC Securities, predicted that China's economy would maintain rapid growth in the next year,especially in power supply, petro-chemistry, and auto manufacture.

The structure of domestic demand was undergoing a profound change, and consumption demand in the auto industry, housing, telecommunications and tourism was on a sharp rise, Chen said.

Such a structure had propped economic growth for Japan and the Republic of Korea for over 10 years, and it would also work for China's economic development, Chen further explained.

Chen said the price of many Chinese equity shares was now at a historical low point, suggesting that it was good time for securities investment with comparatively minor risks.

There was every reason to believe that many equity shares in China's stock market had strong investment value, Chen noted.

Tu Guangshao, vice chairman of China Securities Regulatory Commission (CSRC) said last Monday that China's securities market was "warming up" for a possible investment surge and the market structure adjustment would be further promoted in a substantial way in 2004.

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