Investors start to shun stock market amid volatility

Updated: 2007-07-17 15:49

The volatility of stock market has led to a sharp decline in the number of newly opened trading accounts in China, the China Securities Depository and Clearing Co Ltd announced on Monday.

Investors opened 66,100 A-share accounts on Friday, the second consecutive day when the number of new accounts opened daily was below 70,000, according to the company.

It said the A-share accounts opened each day dropped to 99,957 on July 2, the first time lower than 100,000 since May 12, and remained under 100,000 for ten consecutive days. The number was over 300,000 at its peak time.  

The share prices went up and down last week, with the Shanghai Composite Index closing at 3914.4 points on Friday, up 3.5 percent over the previous week.

Analysts said the recent stock volatility has dampened investors' enthusiasm and prompted them to halt their frenzy rush to the stock markets for higher earnings.

Investors' heavy fund inflow had pushed the Shanghai Composite index to a record high of 4,335.18 points on May 29, an increase of 62 percent since the beginning of the year.

Investors started to lose confidence in the stock market since it experienced ups and downs from May 30 when China tripled the stamp tax for stock transactions amid a spate of government measures to cool the equity market.

The total accounts on both Shanghai and Shenzhen stock exchanges, including A-share, B-share and mutual fund accounts, reached 108 million as of Friday, according to China Securities Depository and Clearing Co Ltd.

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