China's bullish stock market may undergo correction

Updated: 2008-01-12 14:03

BEIJING -- China's stock market has been forecast to remain bullish in 2008 but might dip in the medium and short term, the Chinese Academy of Science (CAS) said in its latest report.

The market would face a tight fund supply since several medium and small companies had gone public every week since October 2007, it said.

Since November 2007, more large and small shareholders of previously non-tradable shares sold their shares, the value of which exceeded 200 million yuan (27.5 million US dollars).

Generally, a bullish market cycle lasts from 17 to 24 months, but China's bullish market had continued for 29 months from June 6, 2005, to November 2007.

The report, however, pointed out the stock market would remain bullish this year in a whole after the correction.

The Chinese economy would continue its rapid growth over the next few years and the earning growth of listed companies was expected to exceed 20 percent or even 30 percent in 2008, the report said.

As long as the Chinese currency of Renminbi continued to appreciate, the bullish stock market will not end, it said.

Many stocks might undergo correction but still had the possibility of going up, the report said.

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