Is Chinese market over heated

[weiwei]

3 days holiday is coming, and the trading is slow. So would like to get a discussion form others on current Chinese market.

Is Chinese Market over heated?

Please give your view.

[weiwei]

Here are some facts.

1. the market has been rally and rally, making new high after new high.

2. It is so hot now, the news spread out to every one in China. Students, Taxi drivers, old ladies, who have no idea of what stock market is, are all joining the rally now.

[weiwei]

So Here is my view.

I think a correction will be there, but not a bust

Reason being

1. A lot of news papers are taking about it, and saying that this is a bubble and it is going to bust. This news even made it to USA, and many think it is a bubble. (btw, only big news from China can made its way to US)

From a technical perspective, when many people, especially major news papers talk about bubble about to bust, usually it will last longer or much longer then most people think. This is taken from a contrarian point of view

2. From a fundamental view: China just start to build itself up since 1980. It has build a lot of infrastructures, but a lot of systems are still not in a mature state. for example: Banking, Insurance, financial. So there will still more expansion for all these to become mature.

[torero]

I think the correction in Feb might be a warning. Now every mailman and dentist is investing fully blindly, reminds me of tech bubble nearing end (I was ignorant then like lots of people of the stock market). Only charts will tell the truth where SM and DM go.

[The Bear]

	Quote:	weiwei
	3 days holiday is coming, and the trading is slow. So would like to get a discussion form others on current Chinese market. Is Chinese Market over heated? Please give your view.

This is a real bull market. Even if speculation is abnormally high causing drastic corrections and huge swings, this doesn't mean it's a bubble. The fact is China is growing and it's not going to stop any time soon.

[thetradingdoctor]

XIN) 1st Ld: China raises stamp tax on securities to cool stock market

BEIJING, May 29, 2007 (Xinhua via COMTEX) -- China will raise the stamp tax on securities trading from the current 0.1 percent to 0.3 percent beginning May 30, the Ministry of Finance said Tuesday night.

An official with the ministry said the tax rise, which has been approved by the State Council, or the Chinese cabinet, is intended to help promote the healthy development of the securities markets.

The government lowered the tax rate from 0.2 percent to 0.1 percent in January
2005 in an effort to boost the bearish market.

China imposed a six per thousand stamp tax on stock transactions when its stock markets were created since 1990. The tax rate was later readjusted a couple of times. China has collected more than 100 billion yuan (some 12 billion US
dollars) in stamp tax on stock transactions since then.



Copyright 2007 XINHUA NEWS AGENCY.

Doctor Janice (The Trading Doctor)