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Gains likely to extend
By Winny Wang |
February 16, 2009, Monday
|
Print Edition
Print Edition
THE Shanghai stock market is expected to extend its gains this week, backed by strong investor confidence and adequate liquidity, analysts said.
"The surge in new credit in January led to sufficient short-term liquidity that drove up the stock market," said Wang Shuai, an analyst at Stockfly Securities Co.
New yuan-denominated loans in China rose by a record 1.62 trillion yuan (US$237 billion) last month, a jump of 21.3 percent from a year earlier. The money supply grew by the fastest pace in more than a year pushed by the central government's economic stimulus efforts.
"The strong investor confidence is another factor that stimulated the market. The government's stimulus package covers almost all industries, so investors are optimistic about the market's future trend and are confident that further positive policies" will be launched, said Wang, who forecast the index at between 2,185 and 2,400 this week.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard currency B shares, gained a total of 6.4 percent from a week earlier to 2,320.79 last Friday, and the combined turnover last week hit a 12-month high at 758.1 billion yuan.
"Although imports and exports declined sharply in January, the market believed the end of the economic downturn is in sight, so the index wouldn't drop significantly," said Yi Xiaobin, an analyst of Galaxy Securities Co.
China's exports fell 17.5 percent, the fastest pace in more than a decade, last month to US$90.45 billion, and imports continued to tumble due to faltering global and domestic demand.
"The surge in new credit in January led to sufficient short-term liquidity that drove up the stock market," said Wang Shuai, an analyst at Stockfly Securities Co.
New yuan-denominated loans in China rose by a record 1.62 trillion yuan (US$237 billion) last month, a jump of 21.3 percent from a year earlier. The money supply grew by the fastest pace in more than a year pushed by the central government's economic stimulus efforts.
"The strong investor confidence is another factor that stimulated the market. The government's stimulus package covers almost all industries, so investors are optimistic about the market's future trend and are confident that further positive policies" will be launched, said Wang, who forecast the index at between 2,185 and 2,400 this week.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard currency B shares, gained a total of 6.4 percent from a week earlier to 2,320.79 last Friday, and the combined turnover last week hit a 12-month high at 758.1 billion yuan.
"Although imports and exports declined sharply in January, the market believed the end of the economic downturn is in sight, so the index wouldn't drop significantly," said Yi Xiaobin, an analyst of Galaxy Securities Co.
China's exports fell 17.5 percent, the fastest pace in more than a decade, last month to US$90.45 billion, and imports continued to tumble due to faltering global and domestic demand.
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