China steps in to prop up stocks

[The Smoking Man]

China steps in to prop up stocks

By Patti Waldmeir in Shanghai

Published: September 18 2008 14:16 | Last updated: September 19 2008 01:45

Dramatic steps to prop up the Chinese stock market were unveiled by Beijing on Thursday after a 70 per cent fall in stock prices since last October.

The stamp duty on stock purchases will be scrapped and government money will be used to buy shares to support the market, state media said. Beijing said Central Huijin, an arm of the country’s sovereign wealth fund, would buy into listed companies, including the state-owned Industrial and Commercial Bank of China, Bank of China and China Construction Bank.

Chinese bank shares have fallen steeply in response to the global financial crisis, helping drive the Shanghai Composite index to a 22-month low of 1,896 on Thursday. The market peaked last October at 6,092.

Earlier this week, the Shanghai index breached the important psychological barrier of 2,000, triggering widespread rumours the government would intervene.

Several Shanghai stockbrokers said they believed government-sanctioned share purchases began even before the official announcement on Thursday night, helping Shanghai recover from a 6 per cent early decline to close 1.72 per cent down on the day.

Beijing was trying to provide a floor for the market, which had seemed in free-fall since the weekend crisis on Wall Street, China market experts said on Thursday night. But it is not clear if the government will succeed in stopping the market slide, they said.

Previous such efforts – including an April cut in stamp tax – have yielded only brief recoveries. “There will be a quick rebound of the market but the impact tends to be shortly phased,” said Mu Qiguo of Guangda Securities in Shanghai.

Qian Qimin, of Shenyin Wanguo Securities in Shanghai, said he expected further intervention if the reaction to Thursday’s measures was only “lukewarm”.

[shan]

Cheers , i bought in 5000 shares with 4.87/share yesterday afternoon( i was very hesitate at that time since i didn't know if it would drop again ) but obviously it was under it's real value which is 20RMB/share



today it was raised to 5.59/share 

[Polly]

  Wow, Rich Woman!!  But be careful this is just a rebound, we are far far away from out of the woods.  And this is not a time to buy for long time holding.  Just my 2 cents.

[shan]

in China , the stock market is like a Casino, you have to dance with the market maker .

i am staring at the K lines at any sec .

[shan]

my mom bought this fund at 0.74 /share 

[shan]

中证网

据路透社报道,投资银行摩根士丹利周五称,中国政府的救市措施仅是为A股和H股增加一条防守线,并不意味着市场已触底可展开升势。该行认为股市只会有短暂的上升,投资者应趁势沽出股份。

摩根士丹利认为,虽然北京公布单边徵收股票交易印花税和在二级市场购入国有上市银行股份,但内地房地产正面临崩溃,且内需疲弱,显示经济放缓已相当明显;环球的金融市场风暴仍未停步。当市场处于极度悲观,如中国国内生产总值(GDP)的数据低企,和预料盈利增长下跌时,才是买入的时机。

对于中央的救市措施,该行认为应可暂时稳定A股和H股的市况,但市场之後会再渐渐陷入调整,因为企业的盈利即将衰退,A股和H股市场现时面对着基本面的问题,不仅仅是投资气氛低迷.其重申对市场持谨慎的看法,并建议投资者在熊市的反弹期间沽货。

德意志银行亦认为,中国政府是次的救市措施,内容更具体,而且反映和多个政府部分的协议,预料令股票市场短期有正面的反应.但投资者现时最为担心的是中国的宏观基本面因素会进一步恶化,包括美国金融危机对中国的深入影响,内地地产价格和投资急跌,盈利增长广泛放缓等.故此,该行认为有关措施难以支持中国股市展开持续的升势。


穆迪:A股救市措施要防适得其反

在昨日有关部门同时出台三大利好政策后,今日A股市场暴涨。但穆迪经济网经济学家陈颖嘉认为,印花税单边征收对改善市场情绪作用有限,当前市场情绪已经被投资者对全球金融市场进展和经济前景的担忧所主导。

她认为,对美国有可能爆出更多的问题公司以及全球动荡对中国经济负面影响的恐惧使得投资者仍将保持谨慎。实际上,政策制定者越表现出孤注一掷,越有可能损害投资者对大陆的信心。任何拯救措施均应该选择恰当时机,以避免不想要的结果。

[Polly]

呢個時候入市真係純粹搏反彈,妹子千萬小心.

[shan]

   a signal that government will not let the market fall further?
i dont think so.
what government does is helpful to stop insanity of panic selling in past several days temporarily,but market is going to run in its own rules in long term. government intervention can greatly impacts on the range of a market volatility,but it can't avert a market from its original trend.if the problem of financial crisis is so easy to be solved,if the government is real to be a master of a market and the market is obedient to its order,why there are so many poor country in the world?why there are economical recession ? therefore, the market will run on its track it takes again after it leaves it for a while for external causes, and the internal causes will be dominated to its speed and direction of run,up till to the fundamental changes of market situation.

   or more, this will be temporary, because USA's entire debt will surely balloon in time, no new product to increase tax collection, joblessness will be mounting, unending wars that cannot be won, 100s of US bases must be maintained around the world and not generating one cent of income for US government...while China sits on getting those billions of US interest, China is doomed?LOL! Free money is really sour.
 

[shan]

i know it's a gambling , but `10% of the investment as profits A DAY is not small money at all

can you expect it elsewhere?

[shan]

and tell me who is the richest man in the world ?

Bill Gates or Warren Buffett ?

[The Smoking Man]

Hmmm Great comparrison ... the guy who makes all the rules and the guy who breaks them.

Not sure if you are aware but Gates owned a public company and those who had faith in what he was doing made millions. In other words, they didn't gamble on Gates when he first started. They became aware of who he was and wanted to invest in a great little start-up.

Now Microsoft is a blue chip stock ... as IBM was.

The investors didn't fling money at a glass window at the bank and 'hope for the best'.

And that is what is so stupid about all those 'funds' that your mother invested in.

Sure, they are for people who have no idea about the stock market but ... how do you know if your 'fund' will go up or down without being intimate with each of the stocks within tha fund? It's lazy investing and lacks control. You can't pull out of non-performing or losing stock without exiting the fund.

It's much better to buy a portfolio and then micromanage when the market gets dodgy.