What should we buy?

Although experts and analysts are weighing the gains and losses, stock buyers have their own thoughts.

"If the experts cannot persuade me by concrete statistics and logic, I will keep buying stocks," said Zhang Weiguo. Zhang said that's because there are many stocks which he believes will be profitable.

Numerous people are investing in the stock market, hoping to get rich overnight.

But what can be bought that will most likely make a profit?

The CASS report predicted that in spite of a considerable rise of some A shares, the stock market in 2007 will have to undergo acute structural adjustment.

This conclusion by the CASS report is echoed by predictions of many securities companies. Zhou Ming stated that blue chips will lead the mainland stock market, the Hong Kong Stock Exchange and the futures market. He estimated 10 big blue chips will be listed in 2007 and will raise about 100-150 billion yuan.

Gong Qiang added that the market of 2007 will be different from that of last year. In 2006, nearly all stocks were on the rise, but in 2007 blue chips will grow significantly and small and incompetent stocks will be forced to step down.

Gong estimated that finance and communications would be two fast-growing industries in 2007 stimulated by the 2008 Olympic Games and the issuance of 3G licenses.

According to Gong, judging by the stock market performance of other Olympic hosting countries, before and after the Olympics, the stock market should continue to be bullish.

"Take the 1988 South Korean Olympic Games for example. That year, the South Korean stock market rose by 70.5 percent, and the overall increase rate from 1986 to 1988 was 462 percent," said Gong.

Li Junhua, an analyst with GF Securities Co. Ltd., said consumption, financial, engineering and manufacturing sectors, as well as industries with national features, will rise considerably.

While many investors are certainly enthusiastic, market management remains calm. Shang Fulin, Chairman of China Securities Regulatory Commission, pointed out that the optimization of capital market operation is more important than the rise or fall of the stock market.

Currently, futures development is imperative for the development of financial derivatives. Proper management of futures and other financial derivatives will propel the development of the stock market.

Just as many experts pointed out, it is of great importance to eliminate the structural and systematic barriers to build up a healthy and sustainable stock market.