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Market value of Chinese stock market expands 4 pct this week (2) |
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15:58, July 22, 2007 |
The key Shanghai index increased 3.72 percent this week while the Shenzhen Component Index gained 4.69 percent.
After the stock markets closed on Friday, China announced to raise the benchmark one-year lending and deposit rate by 0.27 percentage point as of Saturday and to slash the tax on interest income from 20 percent to 5 percent as of Aug. 15.
Analysts said the tightening measures would have limited impact on the equity markets.
Teng Yin, an analyst at Everbright Securities, said the rosy corporate profit prospects and excess liquidity from the issuance of new mutual funds would prompt the market to new high in volatility.
A total of 678 publicly traded firms announced their interim earnings forecasts by Wednesday. The combined net income of 666, excluding 12 newly-listed ones, would likely to soar by 80 percent to 138.7 billion yuan (18.3 billion U.S. dollars).
Qiu Yanying, an analyst with Shanghai Tianxiang Investment Consulting, said the interest rate hike and interest income tax cut would not affect the market in the short term as they were in expectation and the market has earlier digested their impact.
Source: Xinhua
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