Rally may be short-covering
By Lydia Chen |
August 11, 2011, Thursday
|
Print Edition
Print Edition
SHARES in Shanghai yesterday rose for the first time in four days as analysts said the tumble from the debt crisis in the United States and Europe may have been overrated.
Premier Wen Jiabao on Tuesday urged global action to calm markets, and his remarks boosted investor confidence in Shanghai.
The Shanghai Composite Index gained 0.9 percent to 2,549.18.
But some analysts believed that yesterday's rebound signaled only a short-covering and not strong enough to sustain the recovery. The rebounds in overseas markets also helped the local bourse. The US Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout temporarily.
Yuan Jianxin, an analyst at Changjiang Securities, said yesterday's rebound was only a "short-covering" because the Chinese mainland's stock markets were now like a "startled bird" vulnerable to economic uncertainties both at home and abroad, a view that Ye Tan, an independent financial commentator, agreed with.
Real estate firms were among the strongest counters, with the sector climbing 2 percent. Nearly 6.5 billion yuan in new capital flowed into the sector yesterday.
Six real estate firms, including Hainan Zhenghe Industrial Group Co and Shanghai New Huangpu Real Estate Co, rose by the daily cap of 10 percent. Poly Real Estate Co, China's second-largest listed developer, added 1.5 percent to 11 yuan (US$1.71).
The average price-to-earnings ratio of developers has slumped to about 10 times, which was even lower than that in 2008 when the Shanghai benchmark stock index sank to 1,664 points amid a global financial turmoil.
Premier Wen Jiabao on Tuesday urged global action to calm markets, and his remarks boosted investor confidence in Shanghai.
The Shanghai Composite Index gained 0.9 percent to 2,549.18.
But some analysts believed that yesterday's rebound signaled only a short-covering and not strong enough to sustain the recovery. The rebounds in overseas markets also helped the local bourse. The US Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout temporarily.
Yuan Jianxin, an analyst at Changjiang Securities, said yesterday's rebound was only a "short-covering" because the Chinese mainland's stock markets were now like a "startled bird" vulnerable to economic uncertainties both at home and abroad, a view that Ye Tan, an independent financial commentator, agreed with.
Real estate firms were among the strongest counters, with the sector climbing 2 percent. Nearly 6.5 billion yuan in new capital flowed into the sector yesterday.
Six real estate firms, including Hainan Zhenghe Industrial Group Co and Shanghai New Huangpu Real Estate Co, rose by the daily cap of 10 percent. Poly Real Estate Co, China's second-largest listed developer, added 1.5 percent to 11 yuan (US$1.71).
The average price-to-earnings ratio of developers has slumped to about 10 times, which was even lower than that in 2008 when the Shanghai benchmark stock index sank to 1,664 points amid a global financial turmoil.
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