Investment intelligence. Re-defined

More investment strategies coverage. More access to investment insiders and gurus. More info to make more informed decisions.

»

Booming China market hits high

By Darla Mercado

May 9, 2007 10:42 am ET

Riding high on record-breaking share prices, China’s Shanghai Composite Index today soared beyond the 4,000-point mark for the first time, according to published reports.

Advertisment



Closing at 4,013.09, the index has been lifted by a burst of investing activity amid rocketing share prices: In Shanghai, prices have risen 50% this year, continuing last year’s gain of 130%--a remarkable feat since two years ago the index was in the 1,200 range.

Meanwhile, the Shenzen Composite Index has gained 100% this year, according to The New York Times.

But the rapid growth could be too much of a good thing for China’s government.

Excessive buying in the market could create a stock market bubble and inflate prices, the Times reported.

Stock scams and insider trading are also another worry for regulators.

However, investing activity doesn’t seem to be slowing down.

Even after prices fell 8.8% on Feb. 27—the drop that spurred the global selling spree—investors pooled their money back into the market and bumped the Shanghai Composite Index to its record level, according to the Times.

Comments