Warning: China's Stock Bubble - Three
May 11th 2007 05:56
It is no longer a beware as the world is increasingly paying attention to China's stock market irrational upsurge.
So much that both the Chinese government and investment houses concur that the only solution left is government intervention. Precedents of 1996 and 1999 showed the government issued opinions of the state of the stockmarket influenced the movements of the individual investors to levels closer to comfort.
Essentially, the Chinese market is nearing a tipping point as the Shanghai bourse reached a record peak of 4000 points on Wednesday. It will be a matter of time that even the individual investors will realise that the market is way beyond common sense.
The latest attention was given by Goldman Sachs which stated in its report that the individual investors are not erring on the side of fundamentals, "which tends to create irrational price reactions".
The problem right now is "Timing" for a correction. Hopefully the Chinese government could provide some cushion for a smoother landing than a hard fall.
So much that both the Chinese government and investment houses concur that the only solution left is government intervention. Precedents of 1996 and 1999 showed the government issued opinions of the state of the stockmarket influenced the movements of the individual investors to levels closer to comfort.
Essentially, the Chinese market is nearing a tipping point as the Shanghai bourse reached a record peak of 4000 points on Wednesday. It will be a matter of time that even the individual investors will realise that the market is way beyond common sense.
The latest attention was given by Goldman Sachs which stated in its report that the individual investors are not erring on the side of fundamentals, "which tends to create irrational price reactions".
The problem right now is "Timing" for a correction. Hopefully the Chinese government could provide some cushion for a smoother landing than a hard fall.
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