China SSE hits 5000!!

[TjamesX]

Puttng that in context:

- Its 87% up Year To Date
- Its 26% up from the correction earlier this year that caused world markets to stumble
- Its 18% up from the date when the goverment tried to cool the market by raising stamp duty (at which point there were reports the index was trading at 40-45x forward earnings)

Now they are allowing people to buy Hong Kong shares to try and stop it.

I suppose that's what happens when you have rampant inflation running above bank deposit rates.

 

[TjamesX]

Here's the 5 year hockey stick

 

[felixcatwa]

Shanghai Stock Exchange Composite Index could hit 6000 remark.

 

[TjamesX]

Just an update... we're poised for 6000

thats a 20% rise from the original post - all within a month and a half... the government has failed dismally in its attempt to 'control' speculation in the market.... which was first attempted when the index hit 4000 only a few months ago

 

[BentRod]

Geez...looks treacherous thats for sure.

I heard a chap calling 8000 by the end of the year on the TV today

 

[TjamesX]

Geez...looks treacherous thats for sure.

I heard a chap calling 8000 by the end of the year on the TV today

The thing is - the China story was well known and progressing through 2003-2006, but the market has only taken off in the last 12 months.... the index was at 1752 last October, thats a 342% increase in 12 months



Warning bells are surely ringing. I won't be calling for any crash until after the olympics however....

the govt will prevent this at any cost.

TJ

 

[wavepicker]

The thing is - the China story was well known and progressing through 2003-2006, but the market has only taken off in the last 12 months.... the index was at 1752 last October, thats a 342% increase in 12 months



Warning bells are surely ringing. I won't be calling for any crash until after the olympics however....

the govt will prevent this at any cost.

TJ

If they couldn't control the rise, do you think they have any chace of controlling a fall?

 

[TjamesX]

If they couldn't control the rise, do you think they have any chace of controlling a fall?

Touche

Although I did say they would save the downside at ANY cost, but the attempt to control the market speculation was a pithy increase in stamp duty....

I think the biggest reason for protecting the downside at any cost is that due to inflation, it seems as though property and stocks are becoming proxy bank accounts for the masses, no one wants to keep money at the bank that loses purchasing power..... assets also have the added bonus that the cost of increasing everyones balance is much less than actually putting cash into their bank accounts.... and generally applauded by the market

Oh the wonders of asset bubbles and fiat currency



TJ

 

[greggy]

One must admit that the Chinese market is going gang busters. At some stage its bound to crash. Such groth is simply unsustainable. When it does correct hopefully it won't bring down the rest of the world's financial markets with it.
DYOR

 

[Santob]

They like gambling, as its seen as the embodiment of "luck". Come visit Macau to see this speculative streak in action.

 

[TjamesX]

Well I didn't realise it actually got there by close of trade yesterday....

SSE Composite closed at 6030!!! up 2.15% for the day

Ding Ding Ding

 

[Temjin]

Everybody in China are fully aware of a bubble and no doubt a crash will come eventually, whether it is before or after the olympics. They all know it's going to come, but when a bull market is in rage, emotion and greed comes into play.

Everyone would like a piece of it and pretty much ignore the downside risks. Then they hope to mitigate the risk by closely monitor the market in hope that they can get out before the crash. (and will probably fail miserably )

 

[TjamesX]

The Govt are at it again;

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1S1czxMM0BM&refer=home

Opening up arbitrage opportunities for shares that are dual listed in US and China to try and halt the upward rise in China.

Couple of interesting points in article;

- Shares trade on average at 56 times earnings in China
- Sinopec trades at 36 times earnings in China and 18 times in the USX

TJ

 

[propro1234]

well, it's the same thing happening in HKSE. It likes ridding a roller coaster up and down all the time.