China Securities Market Reviews
For the week of December 21st to 25th

[Chinese GB]  [Chinese Big5]

MF Securities

Weekly Stock Analysis Provided by MF Securities Ltd.

Last Week's Top Gainers

Shanghai Market
Qianfeng Gufen22.65+16.15%
Beiya Group8.70+12.11%
Beijing Tianqiao25.00+11.96%
Ji'nan Qingqi7.18+10.9%
Fuxing Industry33.46+10.50%
Shenzhen Market
ST Liaoning Materials9.60+13.48%
Yanhu 13.89+13.30%
Shenahen Tiandi A Shares12.05+10.55%
Hubei Yihua15.79+10.34%
Xiamen Xindeco13.55+10.34%

Market Review

The market continued its rebound for the second week. The Shanghai Index gained 23.35 points or 1.854% at 1283.12, while the Shenzhen Composite Index finished 62.21 points or 1.937% higher at 3259.57. The advancing issues outnumbered decliners on 7-4 margin on the exchanges, with 15 issues remaining unchanged. The weekly trading value was 65.65 billion RMB.

In the first place, it may be reasonably argued that the continued downturn of the market is the result of technical requirements and profit-taking pressures. Before the deep decline, the main indexes had increased about 15% and many individual stocks had gained over 30% or even 50% in price.

However, more importantly, the recent plummet is attributable to investors' lack of confidence on corporate profitability and on China's national economy.

To date, more 50% of the stocks on the two exchanges have disclosed their mid-term earnings, most of which dropped compared to the same period of last year.

Although the central government has stated again and again that China's national economy can and must realize 8% growth, both the internal and external economic environments are indicating that the targeted growth rate is very difficult to achieve.

The Japanese Yen continues to depreciate and hits its 8-year low. The economic crisis in Asia is deepening. The unbridled floods along the Yangtze River is the most serious in 100 years and is likely to result in tremendous economic losses.

There is still no sign that the downward movement will stop, and the chances are that the market may turn bearish if there is no significant improvements in domestic and international economic environments. Our only suggestion for investors is that they take a wait-and-see attitude at least before September or early October.

The Week in Review
China stock analysis for the
week of December 21st to 25th

Go to our daily stock updates.

Shanghai A

Shenzhen A

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