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Investors divided over stock market

By Zhang Yu (China Daily)
Updated: 2007-03-16 09:52

Chinese investors are divided over whether it's safe to keep buying shares in the volatile stock market.

In a poll conducted on China Daily's website, www.chinadaily.com.cn, 46.82 percent of the 1,053 respondents said they would still buy more shares despite the recent fluctuations. But 36.94 percent disagreed, while the rest said they didn't know.

China's stock market recently saw sharp swings, dropping almost 10 percent on February 27. Global stock markets were similarly affected.

The drop in stock prices has raised concerns of not only stock investors, but also high-ranking officials.

Zhou Xiaochuan, governor of the People's Bank of China, ascribed the global stock slump to globalization. He said he believed the slump was "not triggered by macroeconomic factors and thus would not bring about significant changes".

Some participants in the online survey agreed. According to one, the fluctuation signaled that the domestic stock market "is becoming sounder".

"The domestic stock market is in sync with the international one. People should have faith in such a sound and international market," the netizen said.

Again, some said the fluctuation was not entirely bad for China's stock market. One Web commentator said: "a crash will be healthy in the long run It will scare away speculators, and help create a healthy environment for investors in the long run, hopefully for foreigners like myself as well."

Famed stock investor George Soros last week said China's A-share market plunged probably because it is growing at an unsustainably rapid rate.

Chinese officials just hoped to cool down the market a bit but not drag it to a bear market, Soros was quoted as saying. "I believe China's stock market is sure to maintain stable growth till the 2008 Olympic Games," he said.

Some netizens shared Soros' views. "China's economy is growing; the drop in prices is only a temporary phenomenon," said one. "It will go up again. I'll continue buying," said another netizen.

But quite some respondents showed no confidence in China's stock market, fearing they will lose their investments.

"I think the Chinese stock market has a long way to go before it gets mature and strong. The market will become strong and mature with the development of the economic and legal systems," said one respondent.

"Small investors are always the losers because the Chinese market is not mature and influenced by many non-market factors. I quit stocks after losing my hard-earned money, and won't invest again," said another.