Market Saving Policy Won't Bring Prosperous Gains

The Central Huijin Investment Company, an investment arm of China's sovereign-wealth fund, bought shares in four major Chinese State-owned commercial banks on the secondary market on the first trading day after the long national holiday this week. Does this kind of share increase indicate that the stocks are at a low ebb¹ and will these purchases make them more attractive to other investors³? Some market insiders provide their own opinions.

Let's take a closer look with our reporter Liu Min.

 
The four banks include the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China and the China Construction Bank. Right before the close of trading on Monday, the four banks stock prices picked up momentum⁴ by rising 0.23 to 0.7 percent after a series of recent slumps⁵.

Market analysts⁷ believe Central Huijin's buying-in is a clear signal of market saving, which is helpful in encouraging investor² confidence. Financial Analyst⁶ Gui Haoming is from Shenyin & Wanguo Securities.

"As the major share holder⁸ of the four banks, the Central Huijin Investment Company does want to hold up the stock prices. Its main purpose is to tell the investors that the company is quite positive about the bank-stocks' trend and the Chinese economy, and also optimistic about the Chinese stock market. Such confident expression should have a guiding effect over the share market."

This is the third time the central investment company has increased its shares in these four banks. And this time, the number of shares was much larger than in previous transactions. According to statistics shown on the A-share market on Monday, the capital invested by the company reached 197 million yuan in total. The company has also indicated that this is just a start and it will follow trends in the banks' share's closely to decide whether to make further purchases.

Yang Delong, a senior stock analyst has some doubt on its impact.

"The company Huijin has invested much more capital in protecting the stock prices compared to its strategy in 2008. On average, it increased two million shares on average in 2008, but this time, it invested about 10 million each on average with the total amount of capital being about 200 million yuan. The stocks rebounded¹⁰ in 2008 after the purchase, but the market slumped¹¹ down to 1660 points because of the economic crisis. So I predict that the stock prices will continue to drop for some time before they hit the bottom. Investors have to be cautious when analyzing¹² these trends."

Many analysts share the view that this rescue measures will have limited impact on the Chinese stock market due to the complicated domestic and global economic environment. First, the international economic situation is quite unstable¹³. The European and American debt crises will further develop and cause a redistribution of global economic gains. Second, China is also going through a major industrial structure reform. Surging labor¹⁴ costs which have caused systemic inflation won't fade away any time soon in China. In addition to this, the domestic financial policies are still tightening¹⁵ up.

Financial Commentator¹⁶ Shui Pi says investors need to follow China's monetary¹⁷ policies more closely to make accurate judgments¹⁸ about the future.

"Protective stock market policies won't reverse the entire direction of the market. We need to look at the overall monetary policy. We need to see if the central government will introduce loose monetary policies in certain fields. Only when the monetary policy changes, will the market have solid foundations to pick up momentum. That's when market-rescuing methods really work; otherwise the current purchases can only result a brief rebound⁹ on stock prices."

The recent information from the central financial administrative¹⁹ department indicates that it's still quite difficult to loosen up overall monetary policy in the near future. With CPI currently at a high, the monetary policy over the next three months may be slightly adjusted to the favour of agriculture, small and medium enterprises and government subsidized housing projects. Some analysts believe this adjustment will help avoid some the side effect of the current tight monetary policy.
 
For CRI, I'm Liu Min.

1 ebb   

vi.衰退，减退；n.处于低潮，处于衰退状态

参考例句：

• The flood and ebb tides alternates with each other.涨潮和落潮交替更迭。
• They swam till the tide began to ebb.他们一直游到开始退潮。

2 investor   

n.投资者，投资人

参考例句：

• My nephew is a cautious investor.我侄子是个小心谨慎的投资者。
• The investor believes that his investment will pay off handsomely soon.这个投资者相信他的投资不久会有相当大的收益。

3 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

4 momentum   

n.动力，冲力，势头；动量

参考例句：

• We exploit the energy and momentum conservation laws in this way.我们就是这样利用能量和动量守恒定律的。
• The law of momentum conservation could supplant Newton's third law.动量守恒定律可以取代牛顿第三定律。

5 slumps   

萧条期( slump的名词复数 )； （个人、球队等的）低潮状态； （销售量、价格、价值等的）骤降； 猛跌

参考例句：

• Deflation could emerge from simultaneous slumps in the world's three major economies. 如果世界经济三大主体同时衰退，通货紧缩就会出现。
• This is the cycle of economic booms and slumps. 这是经济繁荣和经济萧条的周期变化。

6 analyst   

n.分析家，化验员；心理分析学家

参考例句：

• What can you contribute to the position of a market analyst?你有什么技能可有助于市场分析员的职务？
• The analyst is required to interpolate values between standards.分析人员需要在这些标准中插入一些值。

7 analysts   

分析家，化验员( analyst的名词复数 )

参考例句：

• City analysts forecast huge profits this year. 伦敦金融分析家预测今年的利润非常丰厚。
• I was impressed by the high calibre of the researchers and analysts. 研究人员和分析人员的高素质给我留下了深刻印象。

8 holder   

n.持有者，占有者；(台，架等)支持物

参考例句：

• The holder of the office of chairman is reponsible for arranging meetings.担任主席职位的人负责安排会议。
• That runner is the holder of the world record for the hundred-yard dash.那位运动员是一百码赛跑世界纪录的保持者。

9 rebound   

v.弹回；n.弹回，跳回

参考例句：

• The vibrations accompanying the rebound are the earth quake.伴随这种回弹的振动就是地震。
• Our evil example will rebound upon ourselves.我们的坏榜样会回到我们自己头上的。

10 rebounded   

弹回( rebound的过去式和过去分词 )； 反弹； 产生反作用； 未能奏效

参考例句：

• The ball rebounded from the goalpost and Owen headed it in. 球从门柱弹回，欧文头球将球攻进。
• The ball rebounded from his racket into the net. 球从他的球拍上弹回网中。

11 slumped   

大幅度下降，暴跌( slump的过去式和过去分词 )； 沉重或突然地落下[倒下]

参考例句：

• Sales have slumped this year. 今年销售量锐减。
• The driver was slumped exhausted over the wheel. 司机伏在方向盘上，疲惫得睡着了。

12 analyzing   

v.分析；分析( analyze的现在分词 )；分解；解释；对…进行心理分析n.分析

参考例句：

• Analyzing the date of some socialist countries presents even greater problem s. 分析某些社会主义国家的统计数据，暴露出的问题甚至更大。 来自辞典例句
• He undoubtedly was not far off the mark in analyzing its predictions. 当然，他对其预测所作的分析倒也八九不离十。 来自辞典例句

13 unstable   

adj.不稳定的，易变的

参考例句：

• This bookcase is too unstable to hold so many books.这书橱很不结实，装不了这么多书。
• The patient's condition was unstable.那患者的病情不稳定。

14 labor   

n.劳动，努力，工作，劳工；分娩；vi.劳动，努力，苦干；vt.详细分析；麻烦

参考例句：

• We are never late in satisfying him for his labor.我们从不延误付给他劳动报酬。
• He was completely spent after two weeks of hard labor.艰苦劳动两周后，他已经疲惫不堪了。

15 tightening   

上紧，固定，紧密

参考例句：

• Make sure the washer is firmly seated before tightening the pipe. 旋紧水管之前，检查一下洗衣机是否已牢牢地固定在底座上了。
• It needs tightening up a little. 它还需要再收紧些。

16 commentator   

n.注释者，解说者；实况广播评论员

参考例句：

• He is a good commentator because he can get across the game.他能简单地解说这场比赛，是个好的解说者。
• The commentator made a big mistake during the live broadcast.在直播节目中评论员犯了个大错误。

17 monetary   

adj.货币的，钱的；通货的；金融的；财政的

参考例句：

• The monetary system of some countries used to be based on gold.过去有些国家的货币制度是金本位制的。
• Education in the wilderness is not a matter of monetary means.荒凉地区的教育不是钱财问题。

18 judgments   

判断( judgment的名词复数 )； 鉴定； 评价； 审判

参考例句：

• A peculiar austerity marked his judgments of modern life. 他对现代生活的批评带着一种特殊的苛刻。
• He is swift with his judgments. 他判断迅速。

19 administrative   

adj.行政的，管理的

参考例句：

• The administrative burden must be lifted from local government.必须解除地方政府的行政负担。
• He regarded all these administrative details as beneath his notice.他认为行政管理上的这些琐事都不值一顾。