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Wan LixinOpinion deputy editor of Shanghai Daily
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Economic hopes seen to cement index
By Joyce Pan |
July 13, 2009, Monday
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Print Edition
Print Edition
THE Chinese mainland's stock market is likely to remain strong this week on increased speculation that an economic recovery is under way, analysts said.
"Economic data have exceeded market expectations, bolstering the local benchmark index," Everbright Securities Co wrote in a research note. "Despite concerns over a tightened monetary policy, data on fixed asset investment and industrial output to be released are likely to show positive signs, leading to better corporate earnings."
The Shanghai Composite Index edged up 0.8 percent last week after fluctuating widely, influenced by a weird combination of being concerned over asset bubbles and feeling upbeat over economic prospects.
New yuan lending last month jumped to 1.53 trillion yuan (US$3.27 billion). Analysts believed the credit loans together with the 4-trillion-yuan stimulus package will give a boost to the country's key industries and company profits.
However, others warned about an overheated economy straining under a massive overhang of loans. "Optimism of an economic recovery and abundant liquidity may incur asset price bubbles and outpaced real valuations," said Xu Wei, a Sinolink Securities Co analyst.
Southwest Securities Co analyst Zhang Gang said: "Lenders remain sluggish and are likely to restrict the index's rebound on growing speculation of a tighter monetary policy."
There are also concerns the resumption of initial public offerings on the two mainland bourses will dilute capital and cause a correction after shares of Guilin Sanjing Pharmaceuticals Co and Zhejiang Wanma Cable Co almost doubled on their first trading day last Friday.
Teng Yin, an analyst at Everbright Securities, forecast the index at between 3,080 and 3,250 points.
"Economic data have exceeded market expectations, bolstering the local benchmark index," Everbright Securities Co wrote in a research note. "Despite concerns over a tightened monetary policy, data on fixed asset investment and industrial output to be released are likely to show positive signs, leading to better corporate earnings."
The Shanghai Composite Index edged up 0.8 percent last week after fluctuating widely, influenced by a weird combination of being concerned over asset bubbles and feeling upbeat over economic prospects.
New yuan lending last month jumped to 1.53 trillion yuan (US$3.27 billion). Analysts believed the credit loans together with the 4-trillion-yuan stimulus package will give a boost to the country's key industries and company profits.
However, others warned about an overheated economy straining under a massive overhang of loans. "Optimism of an economic recovery and abundant liquidity may incur asset price bubbles and outpaced real valuations," said Xu Wei, a Sinolink Securities Co analyst.
Southwest Securities Co analyst Zhang Gang said: "Lenders remain sluggish and are likely to restrict the index's rebound on growing speculation of a tighter monetary policy."
There are also concerns the resumption of initial public offerings on the two mainland bourses will dilute capital and cause a correction after shares of Guilin Sanjing Pharmaceuticals Co and Zhejiang Wanma Cable Co almost doubled on their first trading day last Friday.
Teng Yin, an analyst at Everbright Securities, forecast the index at between 3,080 and 3,250 points.
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