Wednesday, May 09, 2007

number of the day / new trading accounts in china

when i read news like this about china the song "one step beyond" from madness comes to mind. they should bring out a chinese version "10 steps beyond" remixed by "mega madness"

mir fällt beim lesen solcher news immer gleich die gruppe madness samt dem titel "one step beyond ein". zeit für ne chinesische neuauflage remixed from "mega madness"

Some 4.787 million new A-share trading accounts were opened in April, more than the combined number of the previous two years, statistics from China Securities Depository and Clearing Corporation.

China's main stock index hit a fresh all-time high after breaking a key barrier of 4,000 points due to the soaring blue chip stocks as investors shrugged off official warnings of a possible market bubble amid soaring corporate profits

The stocks in the Shanghai and Shenzhen markets are trading at more than 40 times earnings per share on average, much higher than developed markets overseas.

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Blogger regli said...

Roubini addresses the issue as well. I agree with this comment "... sterilizing $50 billion of reserves is clearly mission impossible and the consequences of this monetary boom are a mass of liquidity that is flowing into the stock market creating a massive bubble. ...".

10:26 PM  
Blogger jmf said...

hello regli,

thanks. the longer this last the more china reminds of the stock market bubble in around the world in 1999/2000.

i can remember my active time as a banker when i had to open 5 to 6 times the usual trading accounts or depots as we call it in german.

it was the time when big ipo´s like deutsche telekom, infineon etc flooded the market on a weekly basis.

old people were investing the first time in stocks and bought the riskiest stocks and opened accounts for their grandchildren to increase the chance to get something from the ipo etc.....

3 month after this frenzy ended the market collapsed.........

10:46 PM  
Blogger DannyHSDad said...

I just saw a NHK (japanese TV) special on Chinese stock craze last night. They are at it like there's no tomorrow.

One retired couple they interviewed were 100% invested in stocks and were actively trading on daily basis. They were up 30% YTD this year. Can we say dotcom bubble pre-2000? They even showed one day of noticeble stock drop on rumors and this couple decided to buy on bad news and they did well the next day. This buying on the dips mentally is just like what happened post-2000 (and most tech companies on NASDAQ have yet to recover 7 years later).

As one Japanese stock analyst puts it, the Chinese are putting money in the stocks much like how Japanese do it in panchiko parlor (gambling arcade), rather than studying the fundamentals and making investment decisions.

Those who cannot remember the past are condemned to repeat it -- George Santayana


10:14 AM  
Blogger jmf said...


it will be interesting to see what will happen tomorow after the weak day on wall street....

maybe they can buy another (big) dip.... :-)

11:59 AM  
Blogger jmf said...

shanghai only down 1% close to 4.000.


11:29 PM  

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