At the start of the week we wrote about the vertigo-inducing climb of the Shanghai Stock Exchange Composite (up another 1.5 percent today!). Excerpting a recent AP piece, we quoted a few new-to-the-game investors who seemed to come straight outta central casting. Today we find more of the same, this time from Reuters.
Here's a telling passage:
"I only need to pay 9,000 yuan interest for the loan I got, but I think I can make at least 70,000 yuan a year by investing that money in stocks," Hua, an office worker, said.
"So why not? I see almost no risk."
And another:
Laid-off workers have become day traders, glued to big screens at smoke-filled city-centre brokerages. Foreign students, trading through their Chinese friends, are dabbling.
State media reported that some companies in Shanghai are even setting aside an hour every day for employees to trade shares....
As befits a feverish market, retail investors like smaller, speculative stocks. Blue-chips, by contrast, have been relative laggards.
And again with the "Olympics put":
"I'm pretty sure that the boom will last at least until the Olympic Games are over next year," Hua, the office worker, said.
"That's been the experience of other countries. So I can't be so stupid as to waste this chance. It won't come again."
Let's be clear: We aren't in the business of calling tops in any market, let alone the Chinese one. But we do think we used the right adjective on Monday: unhinged.
Source
Eadie Chen, "Ignoring warnings, Chinese rush into stocks," Reuters, May 23, 2007
