Stock markets break US$875bln mark in equity value
(Xinhua)Updated: 2006-11-28 09:01
The equity value of China's stock markets had more than doubled from 3.3
trillion yuan at the end of last year to a record seven trillion yuan (875
billion U.S. dollars) on Thursday.
The figure is expected to account for
34 percent of the year's gross domestic product, up from 18 percent of last
year.
Analysts said the rapid growth was solid evidence for the end of the
long detachment of China's stock market from the country's economic
growth.
They said the Shanghai and Shenzhen Stock Markets had finally
started to function as a barometer of the country's economy.
For much of the
past decade, China's stock markets were lacklustre despite the country's rapid
economic growth, which was 10.9 percent in the first half and slowed slightly to
10.7 percent in the first nine months.
Analysts attributed the turnaround
to the country's shareholder reform which intended to optimize the existing
share structure and to float non-tradable shares that were previously barred
from trading.
About 90 percent of 1,161 local firms, with a total market
value accounting for 96 percent of the total of the mainland exchanges, have
adopted the reform.
Given the equity value of stock markets in developed
countries often exceeded their gross domestic product, analysts believe China's stock
exchanges still have a lot of potential.
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