It was a surprise indeed when the Shanghai Composite Index began to reach record highs in the second half of 2006. Intrigued by the burgeoning stock market and potential benefits, more people began opening new accounts in securities trading departments, which were much busier than in the first half of 2006.
Guotai Jun'an Securities has seen people waiting in queues at its new account registration counter.
"After the stock market became bullish in 2006, this long queue is a common sight," said Zhang Weiguo, a stock buyer.
As a matter of fact, 2006 was a banner year for many aspects of the Chinese market. After more than a year of stagnation, Shanghai and Shenzhen stock markets began to launch initial public offerings (IPOs) again in June 2006, with the number reaching 70 at the end of the year, bringing in a total of 164.26 billion yuan.
Meanwhile, as the market matures, securities companies are beginning to log profits. Listed companies are able to pay down debts. Additionally, the successful issuance of warrants and the withdrawal of trial warrants of Baosteel Group and Wuhan Iron and Steel (Group) Corp. contributed to more mature stock, securities and futures markets.
Zhang said he started to trade stocks in 1996, and 2006 was the most profitable year for him.
"In 2006, the return on investment of my stocks has surpassed 200 percent," Zhang said. According to China Securities Journal, about 70 percent of investors made a profit in the bullish 2006 stock market.
But will this trend continue in 2007?
Zhang thinks so.
"I believe 2007 is also a bull year and all of my friends who buy stocks agree with me," Zhang said. What's more, Zhang said some of them have sold a part of their fixed assets and are going to invest the money in the stock market.
The question is: Will the stock market respond positively to buyers' passion?
A 20-percent increase?
"Generally speaking, the stock market will remain bullish in 2007," according to China and World Economic Development Report 2007, issued by the Chinese Academy of Social Sciences (CASS). "The A share market still has development potential and the Shanghai Composite Index will likely hit new record highs."
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