Saturday, May 26, 2007

Quote of the Week

China's two stock markets in Shenzhen and Shanghai have been shooting upwards in the last few months.

But in the last few weeks it's almost been out of control.

Lots of people are jumping into the market, withdrawing large amounts of money out of their savings accounts and buying stocks. Some have even quit their day jobs to hang out at stock exchange outlets to "stir-fry" shares.

Yesterday the Shanghai Composite Index closed at 4,179.78, up 0.69 per cent from the day before.

There's been a lot of concern that there is a bubble growing in the market and that it could burst if the government doesn't step in to control the frenzy. An interest rate hike last week did little to cool investors keen on the market.

Regardless, this is a comment from one official, Xiang Huaicheng, chairman of the National Council for Social Security Funds:

"But the stock market is like beer. It is good to have some bubbles unless there are too many."

If you can read into that cryptic message, please let me know.

1 comment:

Kai Sun said...

napoleon has said china is a sleeping lion and dont wake it up for it will shake the world. with the over heated stock market in china a little sneeze in china the world will catch a cold. what china needs is a slow but steady growth. build up a solid foundation with equal opportunity for the ordinary people not a get rich quick market.