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Investors warned of risks
By Fu Jing (China Daily)
2007-10-17 07:11


 

The securities watchdog yesterday warned investors of mounting risks as the mainland's stock market continued its bull run.

The benchmark Shanghai Composite Index closed at another record high of 6092 yesterday after it broke the 6000 barrier a day earlier.

According to a survey conducted by financial services provider ING, 70 percent of Chinese mainland respondents expect the stock market to continue rising in the next three months.

The market is seen as driven by high liquidity and the return of heavyweight State-owned enterprises from overseas bourses to the domestic A-share market.

Shang Fulin, chairman of the China Securities Regulatory Commission, said risks have been gathering in the stock market and investors must exercise caution.

"I want to express my concern over the lack of risk awareness among investors," Shang told a panel discussion during the 17th National Congress of the Communist Party of China.

Some leading bankers and insurers who took part in the discussion also voiced concerns about "risks and bubbles" in the banking sector and the economy.

Central bank governor Zhou Xiaochuan admitted that risks are growing in the financial market and in overall economic development, but refused to elaborate on "how serious the risk is" as he "didn't want to use his own judgment to affect the decisions of investors".

Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), and a group of leading bankers, insurers and regulators agreed that the financial sector will continue to open up to global partners.

"Just as Party chief Hu Jintao said in his report, we cannot solve problems by closing the door to the rest of the world," said Hu. "Opening up and continuing to integrate into the global capital market is the right solution."

Guo Shuqing, chairman of China Construction Bank, also expressed concern about "bubbles" in economic development but didn't elaborate.

The economy clocked up growth of more than 10 percent in the past four years and grew by 11.5 percent in the first half.

(China Daily 10/17/2007 page1)

 



  Hu Jintao -- General Secretary of CPC Central Committee
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