12 May 2007
Some facts about share trading in China share market:
1) Shanghai Composit Index has appreciated 300% in less than 2 years’ time.
2) Shanghai Composit has has appreciated more than 40% since the beginning of year 2007.
2) Shanghai Composit Index took less than 2 month’s time to breach 4000 mark from the day it surpassed the 3000 mark.
3) The value of shares transacted at the stock exchange in China on 9 May 07 alone was 49b USD, almost double the amount of 26.9b at Nikkei, and almost 3 times the combined value of shares transacted in Australia, Hong Kong, Thailand, Singapore, Malaysia, Korea, India, Taiwan, Indonesia, New Zealand and Vietnam! The amount recorded on 30 March 07 was only 16.4b USD and 5b USD six months ago.
4) About 300k openings of new share trading accounts daily!
In a super bull-run, the people are chasing after stocks because they see the shares prices going higher and higher, not so much and maybe not at all on the fundamental valuation of the stocks, eg. Nasdaq was traded at P/E ratio of more than 100 times in year 2000.
It was reported that most people in China are crazy about share trading, including housewives, taxi-drivers and students. Even a monk was seen trading shares in a stock exchange. When asked why he was trading in the stock market, he said he wanted to multiply the money to help more needy people!
When everyone is in the market and everyone has put the money into the share market, who else to push the stocks higher?
Maybe the experts are ready to cash out, or they may have started to unload their shares…
Will the market go higher? Or just anticipating some kind of excuse before the market plunge…
