From PINR (Power and Interest News Report):
Before closing for the week-long Chinese New Year holiday, the composite index for the Shanghai Stock Exchange briefly broke through the 3,000-point mark for the first time in history.
On February 16, the index closed slightly below the psychologically important mark, but the unprecedented rise in Shanghai’s exchange is increasingly becoming a cause for concern for the Chinese government. After rising 130 percent in 2006, the Chinese stock market has continued its bull run into 2007 (it is up more than 12 percent since the start of January), causing Chinese officials to warn that the market is overheating. Cheng Siwei, vice chairman of the Standing Committee of the National People’s Congress, told the Financial Times in a January 30 interview, “There is a bubble going on. Investors should be concerned about the risks.” When other officials supported his warning, the Shanghai market slumped 11 percent before beginning its recovery on February 6.
Since then, the Shanghai and Shenzhen markets have surpassed previous record highs and are expected to continue the bull run when they reopen on February 26. [Full Text]
