Investment Performance News
- Central banker urges confidence in market
Date: 7-Jun-2007 Sources: (Shenzhen Daily)
A SENIOR central banker urged investors yesterday to keep faith in the turbulent share market, saying the government's policies were geared towards supporting a sound, rising trend.
Wu Xiaoling, a deputy governor of the People's Bank of China, said recent volatility in share prices would not damage the world's fourth-largest economy as long as the market did not turn unhealthy.
'China's economic fundamentals are good, and the intention of the Chinese Government's macro-controls is very clear. That is, to ensure a healthy, rising market,'Wu said.
The Shanghai Composite Index has swung wildly in the past week since the government tripled the stamp tax on stock trades to 0.3 percent from 0.1 percent.
At one point Tuesday, the index was down 20 percent from its record peak scaled May 29. It recovered, however, to close 2.6 percent higher.
'Short-term ups and downs in the market are inevitable. You're always going to get swings. How long those swings last does not matter. What really counts is the fundamental trend,'Wu said.
The index is still up 40 percent since the start of 2007. Last year, it soared 130 percent.
Investors reacted angrily to the tax increase because the government had denied a few days earlier that it was planning such a move.
Officials had been wrong to issue a denial because the final decision was in the hands of senior policymakers and had not been taken, Wu said.
But she denied the government had misled investors or lost credibility over the episode.
Sponsor Results:
