Key share index unlikely to rebound this week
By Lydia Chen |
August 15, 2011, Monday
|
Print Edition
Print Edition
The Shanghai stock market is unlikely to rebound this week after the key index tumbled 1.27 percent last week amid a plunge in global markets, according to analysts.
Qian Qimin, an analyst with Shenyin Wanguo Securities, said although the Shanghai Composite index may not fluctuate wildly investors are unlikely to return to the market en masse especially when positive news that can sustain a rebound are lacking.
The Shanghai index closed 0.45 percent higher at 2,593.17 last Friday. Qian forecast the index at between 2,550 and 2,630 points this week.
Yi Xiaobin, an analyst with Galaxy Securities, cited China's stubbornly high inflation as a core factor that has curbed the market from rising further while the debt crisis in Europe does not seem to fade away anytime soon.
China's inflation hit a more-than-three-year high of 6.5 percent in July, which limited the government to loosen its monetary tightening slightly, Yi said. He agreed with Qian that the Shanghai market may hover between 2,500 and 2,700 points.
"The tightening, which will continue to remain, will limit liquidity into the stock market," Yi said.
But Liu Zhenju, an analyst at China Development Bank Securities, gave a contrary view.
He forecast the market to rebound above 2,700 points this week since current share valuations have already slumped to a historic low and positive half-year earning reports by companies may support a rally.
The average price-to-earnings ratio in the A-share market was around 15.88 times at the end of last week, the lowest level since 2009.
Qian Qimin, an analyst with Shenyin Wanguo Securities, said although the Shanghai Composite index may not fluctuate wildly investors are unlikely to return to the market en masse especially when positive news that can sustain a rebound are lacking.
The Shanghai index closed 0.45 percent higher at 2,593.17 last Friday. Qian forecast the index at between 2,550 and 2,630 points this week.
Yi Xiaobin, an analyst with Galaxy Securities, cited China's stubbornly high inflation as a core factor that has curbed the market from rising further while the debt crisis in Europe does not seem to fade away anytime soon.
China's inflation hit a more-than-three-year high of 6.5 percent in July, which limited the government to loosen its monetary tightening slightly, Yi said. He agreed with Qian that the Shanghai market may hover between 2,500 and 2,700 points.
"The tightening, which will continue to remain, will limit liquidity into the stock market," Yi said.
But Liu Zhenju, an analyst at China Development Bank Securities, gave a contrary view.
He forecast the market to rebound above 2,700 points this week since current share valuations have already slumped to a historic low and positive half-year earning reports by companies may support a rally.
The average price-to-earnings ratio in the A-share market was around 15.88 times at the end of last week, the lowest level since 2009.
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