china’s stock market
The stock market is a place where stocks, bonds, or other securities are bought and sold. When you buy stocks or shares in a company you gain part ownership in that company.
Assorts of stocks in stock market:
When you are buying stocks there are three different types that you may choose from: penny stocks, growth stocks and blue chip stocks.
Penny stocks are stocks from a company that has almost no chance of developing into a big company and the stocks are of very little monetary value.
Growth stocks are companies that have a high potential to achieve great success, but they can also be very risky investments because they not are well established.
The highest level of stock purchasing is buying blue chip stocks. These stocks are of companies that are very well established and have almost no chance of its’ stocks dropping drastically.
There is unprecedented interest in China’s stock market. This is not surprising given the astonishing growth rate of China’s economy in recent years.
There are three classes of Chinese shares:
A shares are the shares that denominated in RMB and listed on the Shanghai or Shenzhen stock exchanges
B shares are foreign-invested shares issued domestically by PRC’s companies; they are also known as RMB Special Shares
H shares are shares that traded in Hong Kong
The history and actuality of the china’s stock market:
The china’s stock market came into being in due form in 1990，taking the debut of the Shanghai Stock Exchange as a label.
In the history of china’s stock market, there’re seven sharp rise and drop, proving the fluctuate of the stock market:
1, from 1990/12/19 to 1992/11/16, the stock index hurricane from 100 points to 1429, then sharply dropped to 400 in five months.
2, from 1992/11/16 to 1994/7/29, 400 — 1536 — 333.
3, from 1994/7/29 to 1996/1/19, 333 — 1053 — 512.
4, from 1996/1/19 to 1999/5/17, 512 — 1510 — 1047
5, from 1999/5/17 to 2000/1/4 , 1047 — 1756 — 1361
6,from 2000/1/4 to 2004/9/13 , 1361 — 2245 — 1000
7,from 2004/9/13 to 2007/4/6 , 1000 — 3300
As you know, recent years, china’s stock market comes into a wondrous boom period. More and more people plunge into the stock market. One reason is that China’s middle class is expanding rapidly, but the state continues to provide negligible health and pension benefits for the elderly, which leads to high savings rates within the middle class; For various reasons, Chinese interest rates remain low, and will likely remain low for the near term. Thus, Chinese investors are encouraged to seek higher rates outside of traditional savings accounts and have easy access to credit. Also, there are limitations on foreign investments, making it difficult for individual investors to enter stock markets outside of China.
As a result, great bubble exists in china’s stock market recently. No wonder that many professional judge of the china’s stock market as “going crazy”.
The foreground of china’s stock market
About the foreground of china’s stock market, different people have different opinions. The pessimistic ones think that china’s stock market faces serious challenge in 2008
Five reasons cause Chinese stock market’s plunge in 2008.
(1), oversea cash outflow
(2), lack of enough cash to continue supporting the stock market
(3), fund redeem
(4), high CPI and real estate
(5), the recent natural disasters
However, there are also optimistic ones express confidence about the china’s stock market.
Guotaijun’an Securities has conducted a survey covering 372 investors, finding that nearly 90% of them believe no bear market will occur in 2008.
90% of the respondents feel optimistic about the conditions of A-stocks in 2008. 44.1% of them have strong faith in a continuous bull market, and 44.4% think it will enter box-concussion stage. Only 4.1% of the respondents express their worries of a bear market.
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