英文: China market-boosting measures seen offset by faster fund-raising - analyst $ `7 P: K; c; ?) |5 h) V* e3 g3 k
The motives behind apparent government attempts to stimulate the domestic stock market remain obscure, but it is clear that the government is not just aiming to generate a short-term speculative rally, DBS Securities analyst Wu Jian said.
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Consequently, it is likely that the recent implementation of fresh market-boosting measures will quickly be followed by a marked acceleration in the pace of fund-raising, Wu said. 3 B7 p9 y& j' n) p0 i
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Share prices in both Shanghai and Shenzhen are sharply higher today on further signs that the government is stepping up its efforts to boost the market.
$ Q: x$ d$ n( Y9 F- u. \: Z# i6 [At 2.21 pm, the Shanghai A-share index was up 145.84 points to 1,776.86, while the B-share index was up 13.44 points at 155.19. The Shenzhen A-share sub-index was up 320.26 points at 3,839.30, while the B-share sub-index was up 132.54 points at 1,460.46. 3 y3 q; A) f* l* [& W7 B G
4 }" m: Y5 B$ ]5 P8 a' c- RShares gained strongly on Friday following publication of an editorial in the official China Securities Journal which was apparently aimed at boosting investor confidence. - B4 Q7 V" @: ~" r
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This has since been followed by the publication of a similar editorial on Saturday, as well as the publication of reports that the government has given up a plan to sell off state shares via the stock market and the publication of provisional regulations raising the threshold for listed companies seeking to launch additional share offers.
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All of these actions appeared to confirm rumours that the government is implementing a ten-point package of market-boosting measures. - o O, k7 E4 E- J: c- C% x
Wu said he believes retail investors have accounted for most of the buying since Friday, while institutions are likely to have been more sceptical about the government's motives.
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4 m4 M5 _6 @6 w" p7 }$ h8 dHe said the government has effectively made a 180-degree turn on its policy towards the market, and although there is widespread speculation that the motive is to prevent a market correction in the run-up to the Communist Party's 16th Congress -- due sometime this autumn -- the actual motive may be to boost the market's ability to channel funds to cash-strapped state firms. 7 ?, y* ^( e5 p/ L. i- X
. ^, @, t% U, P" e$ ]On one hand, the government is keen for the market to provide funds to state firms in order to help these enterprises "get out of difficulties".
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- L: p5 L4 ]3 ^On the other, the government is keen for securities investors to take over burdens currently being carried by the state commercial banks. $ P. R9 F* ]9 J+ K- B1 W8 l% _- E( m# G
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The government wants to achieve a rapid reduction in the commercial banks' non-performing loans, and an acceleration in the pace of share offers will help the country reach this target. 0 F) l7 r9 B. D& ]
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Wu noted in particular that several Hong Kong-listed companies, including PetroChina, China Unicom and China Southern Airlines are slated to launch major A-share offers in the second half of the year. & D- w5 p3 j7 d$ w# G6 V% B( C0 C
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He said institutions are likely to have realised that the government's motive is not to create an environment for speculative gains. ; J0 p$ ]/ p, G3 K* A0 G
Although share prices are likely to trend higher, shares are unlikely to see the kind of overheating that usually follows major government attempts to ramp up share prices, he said.. |