Stock index finishes bullish 2006 on all-time high
By Fei Ya (China Daily)Updated: 2006-12-30 09:57 China's stock market soared to an all-time high on the last trading day of 2006, as a flood of fresh investment funds boosted the benchmark index up 4.2 per cent and brought its total gain for the year to 127 per cent.
 A shareholder checks Chinese stock market movements on a computer monitor, December 29, 2006. The Shanghai Composite Index closed at 2,675.474 points on Friday. [Xinhua]  |
Experts attribute a number of factors to a bullish year that has marked the end of a four-year slump and launched China into the ranks of some of the best performing capital markets in the world. Factors cited include China's continued economic growth, the success of recent market reforms, and massive fund inflows from listings by some of China's flagship firms.
Though the index is not predicted to rise as spectacularly next year, the huge amount of new funds raised for investment in recent months - many of which have not yet entered the market - mean the bull run is unlikely to end soon, analysts said.
The news that the Chinese Government is expected to pass the unification of a corporate tax law in 2007 is among the favourable factors that triggered strong market sentiment in December, a month that has seen a 27 per cent growth.
"Banks will benefit the most from the new tax policy," said She Minhua, an
analyst with the Beijing-based CITIC China Securities.
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