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B share fever spreads
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FRANTIC B share investors have spent the past two days driving the market to new heights, but the race to open trading accounts is only just beginning.
February 26 was officially the first day for Chinese residents to open trading accounts at banks and securities houses. But some investors revealed that they had opened B share trading accounts as early as February 23.
Obviously some banks and securities companies have secretly started the service, a move to lure more investors. Some banks claimed that the move was made in an attempt to relieve the work pressure on the first day of official account opening. Securities companies explained that because too many investors came for consultation, they started the designated service several days ahead of schedule.
The B share market soared after it resumed trading, just as observers had expected.
In Shenzhen, a large number of investors gathered long before securities companies opened; some arrived as early as 6am. But holders of the shares refused to sell, knowing they would get a higher price if they held on and waited.
Shanghai's B share market also attracted a small army of local investors. Securities venues were packed with people. So heavy was the demand that the telephone system in the city's business district collapsed under the strain.
Securities venues in Beijing were also packed. Some investors anticipated a quick return by buying shares today and selling off the next day but they were disappointed by the fact no one was willing to sell yet.
The news media has also gotten in on the act, devoting special coverage to the B share circus. The Shenzhen Special Zone Daily, Guangzhou Daily and Shenzhen Economic Daily are all committing their resources to the story in an effort to attract more readers. The Hong Kong Commercial Daily has even published a special B share investment handbook.
China annouced last week that domestic investors with legal foreign currency deposits would be allowed to trade B shares, opening the floodgates to local cash and unleashing a flood of liquidity into the long ignored market.
(Alfred Zhang)
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