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Investors upbeat over market
By Vivian Jin |
February 21, 2011, Monday
|
Print Edition
Print Edition
INVESTORS may continue to be upbeat about the Shanghai stock market this week despite the central government's announcement to raise the reserve requirement ratio on banks to rein in inflation.
The Shanghai Composite Index gained 2.6 percent to close at 2,899.79 last week before the government unveiled a 0.5-percent hike in the reserves late Friday. The hike was the second so far this year and came after six reserve increases since 2010.
The reserve hike, to be effective from Thursday, will likely freeze over 350 billion yuan from the market. Most analysts said the move was within market expectations.
Huang Xiangbin, an analyst at Cinda Securities Co, said the reserve hike would affect banking and real estate but the stock market was not likely to see a further slump at its current low value.
Investors are banking on the release of positive earnings reports late this week to shore up the market which is also seen to benefit from the diversion of funds into stocks as the government is tightening the housing market.
As the Consumer Price Index rose to an annual 4.9 percent in January, many analysts believed another rise in interest rates or the reserve ratio will be unveiled in March.
Zhang Gang, an analyst at Southwest Securities, predicted the market at between 2,850 and 2,950 this week.
The Shanghai Composite Index gained 2.6 percent to close at 2,899.79 last week before the government unveiled a 0.5-percent hike in the reserves late Friday. The hike was the second so far this year and came after six reserve increases since 2010.
The reserve hike, to be effective from Thursday, will likely freeze over 350 billion yuan from the market. Most analysts said the move was within market expectations.
Huang Xiangbin, an analyst at Cinda Securities Co, said the reserve hike would affect banking and real estate but the stock market was not likely to see a further slump at its current low value.
Investors are banking on the release of positive earnings reports late this week to shore up the market which is also seen to benefit from the diversion of funds into stocks as the government is tightening the housing market.
As the Consumer Price Index rose to an annual 4.9 percent in January, many analysts believed another rise in interest rates or the reserve ratio will be unveiled in March.
Zhang Gang, an analyst at Southwest Securities, predicted the market at between 2,850 and 2,950 this week.
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