Chinese shares ended the 2007 trading year lower on Friday on
both domestic and international market concerns.
After gaining 2,586.09 points since the last trading day of
2006, the benchmark Shanghai Composite Index dropped 0.89 percent,
or 47.3 points, to close at 5,261.56 points.
Heavyweights slumped. PetroChina, the largest-cap stock on the
Chinese market, dropped 1.37 percent to 30.96 yuan (about 4.25 U.S.
dollars).
Tourism and hotel stocks rose on expectations that the upcoming
Lunar New Year holidays, which fall in early February, would bring
benefits.
Analysts attributed part of Friday's declines to weakness in the
international markets. The Dow Jones Industrial Average fell 192
points, or 1.4 percent, to 13,359.61 on Thursday as investors
reacted nervously to Pakistani opposition leader Benazir Bhutto's
death. Japan's key Nikkei Index and the Hang Seng Index in Hong
Kong dropped 1.65 percent and 1.43 percent, respectively.
The Hushen 300 Index, which accounts for 60 percent of the
Chinese stock market's value, dropped 0.55 percent, to 5,338.27
points.
The combined turnover on the Shanghai and Shenzhen bourses
dropped to about 190 billion yuan from Thursday's 200 billion
yuan.
The benchmark index almost doubled in 2007, peaking at a record
high of 6,124 points on Oct. 16, after which it slumped and then
fluctuated around 5,300 for most of the rest of the year.
Chinese investors' psychology seesawed with the market for much
of the year, but analysts said that domestic share investors were
becoming more accustomed to market fluctuations. Their growing
sophistication meant the market was unlikely to experience such
dramatic movements in 2008, said Liu Fenghua, fund manager with
Galaxy Asset Management Co., Ltd..
The number of stock accounts increased 37.79 million to 112.59
million by Dec. 26, of which 112.1 million were held by
individuals, according to statistics from the China Securities
Depository and Clearing Co., Ltd..
Institutions became a major stabilizing factor in the market
over the past year and now hold up to 46 percent of total market
capitalization.
Most analysts believed that China's bull market would continue
in 2008 but the opportunities for speculative profit would be more
limited. And with the government expected to persist with its
tightening policies, investors were expected to become more
selective.
Many investors would look to stocks related to consumer goods,
since both macro policies and rising consumption would support
those sectors in 2008, said Avelyn Yang, deputy head of investment
management with China International Fund Management Co., Ltd..
(Xinhua News Agency December 29, 2007)
