Investors opened 4.79 million new accounts for China's A-share
stock exchanges in the first three months of this year, in a race
to cash in on the bullish equity markets.
The record number of A-share accounts represents a 56 percent
increase from the 3.08 million in the whole of 2006, according to
the China Securities Depository and Clearing Corp. Ltd.
The company also said that 3.74 million new fund accounts were
opened between January and March, increasing China's total A-share,
B-share, and fund accounts to 87.25 million at the end of
March.
As a result, turnover on China's Shanghai and Shenzhen stock
exchanges has expanded rapidly over the past three months, hitting
a record high of 224.41 billion yuan (US$29 billion) on
Wednesday.
Analysts said the excessive liquidity had provided strong growth
momentum for the country's equity markets. The benchmark Shanghai
Composite Index closed at a record high of 3,291.30 points on
Tuesday, surging 20.6 percent this year.
According to Shenyin Wanguo Securities, new money keeps flowing
into the markets amid expectations of rosy corporate earnings and
despite concerns about overheated equity markets and possible
fluctuations, like that of Feb. 27, when the key Shanghai index
plunged 8.84 percent, the biggest single-day drop in a decade.
Shanghai-listed shares were valued at 45.17 times earnings on
Monday, more than double the 18 times in the same period last
year.
US investment bank Goldman Sachs earlier warned that if the
price/earnings ratio exceeds 25 times, share prices are
over-valued.
(Xinhua News Agency April 4, 2007)