China's equity bubble is building, may burst

时间：2007-05-08 07:22:27

（单词翻译:单击）

May 7 - China's all-time high equity1 market needs "cool water and cool heads" after taking a 7-day Golden Week breather, otherwise the stock bubble runs the danger of a quick bust2, experts said.

 

Since its nine-percent correction in late February, the Shanghai A-share equities3 have now moved back up more than 40 percent, and no letup is seen on the horizon, buoyed4 by a series of successful initial public offerings as the ranks of investors5 swell6 at over 200,000 a day. There are now more than 91 million accounts held at brokers7 or mutual8 funds.

 

Xia Bing, director of the State Council's Development and Research Center's Finance Department, warned at a recent CCTV talk show program, that the stock market bubble is building. He and a string of other economists9 suggested investors take extra caution before jumping onto the bandwagon.

 

And, analysts10 at BCA Research put it in a recent note to its customers: "We have no doubt if China's market continues to spike11 up, the stage will be set for a very violent drop."

 

In late April, the People's Bank of China ordered the ratio of commercial banks deposits at the central bank be raised to 11 percent, but the measure failed to dampen the bullish market. The surge has continued. Many economists are anticipating another interest rate hike in May or June to stonewall the soar.

 

Some critics argue the way the mainland IPO market is being run systematically12 fans the irrational13 expectations of a huge number of novice14 investors with the promise of easy and quick money, storing up trouble ahead.

 

It is widely believed that mainland investors are mostly momentum-driven and ignorant of valuations, but they can see the IPO market is serving up a bargain. While stocks in the A-share market trade at stiff premiums15 to Hong Kong, dual-listed equities often continue to list at a discount in the mainland.

 

The situation is due to the influence of the powerful China Securities Regulatory Commission (CSRC) which micromanages new listings, sets final pricing of IPOs and subsequent fund-raisings as well as deciding who gets to list, analysts said.

 

For example, Bank of Communications recently listed at 7-20% cheaper in Shanghai than in Hong Kong, following a similar practice for China Life Insurance and Ping An Insurance.

 

In most other competitive markets, pricing is a commercial compromise based on what companies think they can get and what investment banks think the market can take.

 

A standard move these days is for the CRSR to force companies to set a lower price on their IPOs in the hope of a strong stock market performance. This has undoubtedly16 contributed to the general market euphoria. The average price-to-earnings ratio of Shanghai and Shenzhen markets is now over 50.

 

In the absence of traditional measures to cool the market such as significantly raising interest rates, another solution the authorities, in the hope to achieve a stronger and more stable market, are eyeing to bolster17 the stock market is by adding more quality companies to soak up excess liquidity18.

 

The authorities have inspired mainland companies to list on domestic bourses rather than Hong Kong's, it has further encouraged overseas quality companies, such as the venerable HSBC Holdings to list A-shares in the mainland.

 
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点击收听单词发音收听单词发音  

1 equity ji8zp     
n.公正，公平，（无固定利息的）股票
参考例句：
  • They shared the work of the house with equity.他们公平地分担家务。
  • To capture his equity,Murphy must either sell or refinance.要获得资产净值，墨菲必须出售或者重新融资。
2 bust WszzB     
vt.打破；vi.爆裂；n.半身像；胸部
参考例句：
  • I dropped my camera on the pavement and bust it. 我把照相机掉在人行道上摔坏了。
  • She has worked up a lump of clay into a bust.她把一块黏土精心制作成一个半身像。
3 equities 501c457a1f918a4b41824052f5a3f5eb     
普通股，股票
参考例句：
  • These are invested mainly in the OECD bonds and equities. 这些资产主要投资于经济合作及发展组织的债券与股票市场。
  • They are also advantage of the global rebound in equities. 它们还在利用全球股市反弹的机会。
4 buoyed 7da50152a46b3edf3164b6a7f21be885     
v.使浮起( buoy的过去式和过去分词 )；支持；为…设浮标；振奋…的精神
参考例句：
  • Buoyed by their win yesterday the team feel confident of further success. 在昨天胜利的鼓舞下，该队有信心再次获胜。
  • His encouragement buoyed her up during that difficult period. 他的鼓励使她在那段困难时期恢复了乐观的情绪。 来自《简明英汉词典》
5 investors dffc64354445b947454450e472276b99     
n.投资者，出资者( investor的名词复数 )
参考例句：
  • a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
  • a cash bonanza for investors 投资者的赚钱机会
6 swell IHnzB     
vi.膨胀，肿胀；增长，增强
参考例句：
  • The waves had taken on a deep swell.海浪汹涌。
  • His injured wrist began to swell.他那受伤的手腕开始肿了。
7 brokers 75d889d756f7fbea24ad402e01a65b20     
n.（股票、外币等）经纪人( broker的名词复数 )；中间人；代理商；（订合同的）中人v.做掮客（或中人等）( broker的第三人称单数 )；作为权力经纪人进行谈判；以中间人等身份安排…
参考例句：
  • The firm in question was Alsbery & Co., whiskey brokers. 那家公司叫阿尔斯伯里公司，经销威士忌。 来自英汉文学 - 嘉莉妹妹
  • From time to time a telephone would ring in the brokers' offices. 那两排经纪人房间里不时响着叮令的电话。 来自子夜部分
8 mutual eFOxC     
adj.相互的，彼此的；共同的，共有的
参考例句：
  • We must pull together for mutual interest.我们必须为相互的利益而通力合作。
  • Mutual interests tied us together.相互的利害关系把我们联系在一起。
9 economists 2ba0a36f92d9c37ef31cc751bca1a748     
n.经济学家，经济专家( economist的名词复数 )
参考例句：
  • The sudden rise in share prices has confounded economists. 股价的突然上涨使经济学家大惑不解。
  • Foreign bankers and economists cautiously welcomed the minister's initiative. 外国银行家和经济学家对部长的倡议反应谨慎。 来自《简明英汉词典》
10 analysts 167ff30c5034ca70abe2d60a6e760448     
分析家，化验员( analyst的名词复数 )
参考例句：
  • City analysts forecast huge profits this year. 伦敦金融分析家预测今年的利润非常丰厚。
  • I was impressed by the high calibre of the researchers and analysts. 研究人员和分析人员的高素质给我留下了深刻印象。
11 spike lTNzO     
n.长钉，钉鞋；v.以大钉钉牢，使...失效
参考例句：
  • The spike pierced the receipts and held them in order.那个钉子穿过那些收据并使之按顺序排列。
  • They'll do anything to spike the guns of the opposition.他们会使出各种手段来挫败对手。
12 systematically 7qhwn     
adv.有系统地
参考例句：
  • This government has systematically run down public services since it took office.这一屆政府自上台以来系统地削减了公共服务。
  • The rainforest is being systematically destroyed.雨林正被系统地毀灭。
13 irrational UaDzl     
adj.无理性的，失去理性的
参考例句：
  • After taking the drug she became completely irrational.她在吸毒后变得完全失去了理性。
  • There are also signs of irrational exuberance among some investors.在某些投资者中是存在非理性繁荣的征象的。
14 novice 1H4x1     
adj.新手的，生手的
参考例句：
  • As a novice writer,this is something I'm interested in.作为初涉写作的人，我对此很感兴趣。
  • She realized that she was a novice.她知道自己初出茅庐。
15 premiums efa999cd01994787d84b066d2957eaa7     
n.费用( premium的名词复数 )；保险费；额外费用；（商品定价、贷款利息等以外的）加价
参考例句：
  • He paid premiums on his life insurance last year. 他去年付了人寿保险费。 来自《现代英汉综合大词典》
  • Moves are afoot to increase car insurance premiums. 现正在酝酿提高汽车的保险费。 来自《简明英汉词典》
16 undoubtedly Mfjz6l     
adv.确实地，无疑地
参考例句：
  • It is undoubtedly she who has said that.这话明明是她说的。
  • He is undoubtedly the pride of China.毫无疑问他是中国的骄傲。
17 bolster ltOzK     
n.枕垫；v.支持，鼓励
参考例句：
  • The high interest rates helped to bolster up the economy.高利率使经济更稳健。
  • He tried to bolster up their morale.他尽力鼓舞他们的士气。
18 liquidity VRXzb     
n.流动性，偿债能力，流动资产
参考例句：
  • The bank has progressively increased its liquidity.银行逐渐地增加其流动资产。
  • The demand for and the supply of credit is closely linked to changes in liquidity.信用的供求和流动资金的变化有密切关系。

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