TO THE POINT: The week-long May Day holiday has ended. Yet, instead of being a laborers’ day, the holiday is evolving into a spenders’ day. China’s mainland retailers happily brought in 320 billion yuan in cash over the week, a 15.5-percent increase over the same period last year. For many, the golden week is a gala for consumption. After spending as much as they could, Chinese citizens again shifted their attention to the blossoming stock market. The massive consumption over the holiday didn’t ruin their appetite for stocks at all. The benchmark Shanghai Composite Index soared 2.83 percent to a record 3,950 points, generating more concerns of a stock bubble bursting. The Hong Kong-listed China National Petroleum Corp. is considering returning to the improving and growing mainland stock market. The company recently discovered a major oilfield in north China, and the good news triggered a substantial rise in the company’s stock prices. This year, the Central Government is determined to develop rural areas, and transnational companies like P&G are being invited to join the effort. Currently, many transnational companies are interested in the service industry and are investing heavily to grab a piece of this market. Up to now, 14 foreign-invested companies have been approved by the Ministry of Commerce to conduct direct selling in China’s mainland.

Rocking Stock Market

Investor enthusiasm in the stock market ran high after the May Day holiday, with the Shanghai Composite Index closing at a new record high of 3,950 points on the first working day after the holiday, surging 2.83 percent compared to April 30.

It is reasonable to say that stock enthusiasm will continue for a longer period of time.

On the one hand, excessive liquidity, as reflected in the stock market, means that investors have ample money to buy stocks. With the increasing awareness of the capital market by average citizens, more green investors join the market every day. On the other hand, the impressive performance of listed companies in the yuan-denominated A-share market has shored up investor confidence. By the end of April 30 this year, 1,453 listed companies revealing their annual performance reported profit increases of 45.81 percent compared with a year earlier.

In spite of growing interest in the stock market, watchdogs are on the alert.

Chinese Central Bank Governor Zhou Xiaochuan acknowledged on May 6 that a stock bubble was a concern and that the central bank was monitoring asset prices closely along with inflation.

Many in the money market expect another interest rate hike, possibly in response to the April inflation data, in mid-May. A hike could trigger an equities pullback.

But investors are too enthusiastic to pay any attention to bubble warnings for now. Neither did the previous interest rate hike nor the frequent reserve ratio raises squelch investor confidence, with the Shanghai Composite Index jumping 48 percent since the beginning of this year.

Striking black gold

After almost 20 years of hard work, China National Petroleum Corp. finally made a major discovery and was rewarded by an immense oilfield capable of producing 1 billion tons of crude oil.

The newly found oilfield is located in eastern Hebei Province and experts believe that it is very possible other oilfields could be found in eastern China, despite thoughts that it was considered exhausted.

The exciting news jolted the Hong Kong-listed company’s stock prices, helping it jump nearly 14 percent two days after CNPC announced the news on May 3.

Jiang Jiemin, Chief Executive Officer of CNPC, said it is certain that CNPC will issue A shares in the mainland stock market, but gave no definite timetable.

Gambling on rural China

Rural development will take top priority this year and in years ahead, the Chinese Central Government has vowed. Improving production and living conditions in rural areas will be of utmost importance, according to a report published by the fixed assets investment department under the National Development and Reform Commission.

Though rural China has previously been neglected by investors, Proctor & Gamble (P&G) is now betting that inroads can be made in the countryside. Xinhua News Agency reported that China’s Ministry of Commerce signed a memo of understanding with P&G, encouraging the latter’s cooperation with rural purchasers in Zhengzhou, capital of Henan Province.

P&G’s move sends everyone a signal. Transnational companies, which have been fighting fiercely over investment turf in big cities, are now redirecting their focus on emerging rural markets.