From an eight-year low of 998.22 points in mid 2005, China's stock market has been on a bullish run to the point where the benchmark Shanghai Composite Index at one point topped the 6,000 point barrier.
After peaking at 6,092.06 points on Oct. 16, it seems China's stock market has passed a crossroads and has since been on a downward trend.
With the conclusion of the three-day Central Economic Work Conference on Wednesday in the capital and the country's economic policies determined for 2008, analysts may be able to define how China's stock market will be affected by the macro environment in the coming year.
Here are some facts about the stock market's performance in the past two years or more, which may well have influenced China's top leaders before they come up with policies to be adopted for the next year.
The benchmark Shanghai Composite Index closed at 1161.06 points on the last trading day of 2005, an increase of 16.3 percent from the eight-year low of 998.22 points registered on June 6, as the country initiated a pilot share-holding reform to bring more tradable shares onto the market.
The share-holding reform, also known as the split-share structure reform, aims to make all shares of domestically listed companies tradable on the market.
Previously, only about one-third of the shares in domestically listed firms floated on the market, with the existence of non-tradable shares owned by the state.
The split share structure has been blamed for the stagnate performance of the Chinese stock market in the previous four years, as it put public investors in a worse position than actual controllers who make corporate policies and dispose of the firms' profits and assets.
The Shanghai-listed Sany Heavy Industry was the first listed state-owned company to go through the share-holding reform.
The key index in 2006 surged more than 130 percent to close at 2,675.47 points on the last trading day despite several corrections.
China's stock market was given a boost by the acceleration of share-holding reforms, which greatly enhanced investor confidence, and the resumption of initial public offerings, suspended in 2005 to facilitate share-holding reforms.
The country's domestic market witnessed in 2006 the mega listing of some heavyweights, especially from the banking sector, including the Bank of China and the Industrial and Commercial Bank of China, which together with other heavyweights such as Sinopec became the major force behind the surging stock market.
This year has seen the key index climbing all the way up to 6,092.06 points at the highest along with the strong debuts of a batch of China's large state-owned enterprises, while the country's bullish stock market attracted increasing retailing investors.
Statistics show that Chinese public had opened about 132 million accounts to get engaged in securities transactions by the end of Oct. this year, up from 78.5 million at the end of last year, with the monthly new accounts at record 8.9 million and 7.2 million in Aug. and Sept. when people were caught up in a buying frenzy.
The total turnover registered at the Shanghai stock exchange reached above 200 billion yuan (27 billion U.S. dollars) in April, a giant leap from 60 billion yuan (8.1 billion U.S. dollars) in December 2006.
The stock market also went through fluctuations this year. The key index plummeted by more than eight percent on Feb. 27 after hitting a new high of 3000 points a day earlier, the first trading after the Spring Festival holidays.
It again went down by about 6.5 percent on May 30 from 4334.92 points, followed by almost a week of sluggish performance to hit a low of 3670.40 points on June 4.
The index began a new round of downward adjustment amid seesaw movements of the stock market after it hit the record 6,092.06 points on Oct. 16.
The key index has been oscillating around the 5,000 points in the past two weeks. It stood at 5,042.65 points at Wednesday's closing.
Source: Xinhua
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