Tag Archives: stocks

Stock Market Bubble Alert

Shanghai Securities News (via China Daily) reports that 2 million new stock-trading accounts were created in July. That is the most new accounts opened in a month since February last year. Where fools rush in…

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Shanghai’s Stock Bubble Deflated By Half

Shanghai stock prices have fallen through what analysts usually describe as a psychological level for the want of a more meaningful term. The Shanghai Composite Index was down 50% at one point today from its all-time high last October of 6092.06. Investors are being rattled by inflation in China, close to an 11-year high, and the housing-led credit crunch in the U.S., close to an all-time disaster.

When it set its record the Shanghai Composite had risen almost sixfold over the previous two years. Bloomberg calculates that China’s stock market peaked in value on Jan. 14 at $4.8 trillion and had lost $1.9 trillion through yesterday, equivalent — in another of theose meaningless but irresistible statistics — to the value of Canada and Germany’s stock markets.

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China Railway Construction IPO Is Lackluster

As in Shanghai, so in Hong Kong. The initial public offering of shares in China Railway Construction Corp. in Hong Kong saw only a modest 12% pop during the first day of trading, the smallest gain in a Hong Kong trading debut since November. The Shanghai IPO earlier in the week was the worst first-day gain there since 2006.

China Railway Construction, which shares a duopoly with China Railway Group over railway construction in China, raised a combined $5.4 billion in the two offerings. The lackluster IPO makes one wonder how robust China’s stock market boom remains, and suggests that other new share offerings might struggle to find buyers for as long as world market conditions remain so uncertain.

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