Chinese share prices jumped 1.04 percent for another record finish Monday as investors shrugged off the central bank's latest efforts to cool the economy and stocks, using early losses as a bargain-hunting opportunity instead, dealers said.
They said prices opened down more than 3.0 percent but the key index was soon back in positive territory as investors discounted Friday's moves as more of the same measures that have failed to work since early 2006.
Other stock and asset markets did well yesterday too, as FT reports, with the S&P 500 climbing above its record high close of 1,527.46 at one stage.
But back to China, where Bloomberg reports that another billionaire is warning about a bubble.
Billionaire Lee Shau-kee, chairman of Henderson Land Development Co., said Chinese shares trading on mainland markets are at an "unreasonable" premium to those in Hong Kong, threatening to create "a bubble."
"Mainland investors are too keen to win in the stock market, chasing after stocks no matter what the prices are," Lee told reporters in Hong Kong today. "They are too irrational."
Too keen indeed. As bubbles often do, this one is tempting illegal behaviour. From FT:
The Shanghai government agency responsible for clearing drains and repairing lifts in apartment buildings has emerged as a leading shareholder in at least three listed companies, in spite of being barred from such risky investments.
Reuters sees the continuing gains in the stock market as a test of the Chinese government's will -- not often a good idea.
Rising to a record high immediately after the central bank hiked interest rates, China's booming stock market has entered a battle of wills with the government -- a battle that it may well lose...
"The market seems to have largely ignored the signal that the central bank has sent about a soft landing," said analyst Zhao Wuling at Everbright Securities. "But underestimating the central bank may prove dangerous."...
... [B]y brushing aside the central bank's tightening, the market has sent policy makers a challenge that they cannot afford to ignore if they want to maintain credibility, analysts said...
Investors putting new money to work in China's stock markets ignore the adage 'Don't fight the central bank'," global investment bank ING said in a report on Monday, warning that future pull-backs could unsettle risky markets globally.