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Chinese shares fail to participate in a broad global rally, falling for a 6th consecutive day,...

Chinese shares fail to participate in a broad global rally, falling for a 6th consecutive day, though down just 0.3%. Daiwa joins the list of those cutting GDP growth estimates, now predicting 7.8% Q2 GDP growth from 8.2% (Q2 ends Saturday - thanks guys). The bank trims its full-year forecast to 8.2% from 8.3%, saying a "mini stimulus" plan will keep things moving.
Comments (1)
  • There are two key reasons why Shanghai Index does not follow up with rest of the world's rally.

     

    1. Too many IPO planed for this year.(more than 750 IPO before end of this year). This actually, is drying up the cash flow. Investors would like to sell the index component stocks(which are usually very big) and buy new IPO(which are smaller).

     

    2. Lot of senior management of the IPO-ed company are selling stocks after it passed locked period. (remember, Chinese are new rich, they are eager to get some cash on hands to enhance living standard)

     

    Also,there are some other reasons(for example, invest in real estates have proven more returns).
    27 Jun 2012, 05:35 PM Reply Like
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