Jake's View | Vital aspect missing from the Shanghai through train -trust
There is really only one in any stock market and it is called trust. Unless the people with whom you have invested your money are working for your interests as well as their own, you don't have trust and you don't have much of a stock market.
Stock scheme a vital pillar in reform of mainland markets
Let me tell you about vital pillars. There is really only one in any stock market and it is called trust. Unless the people with whom you have invested your money are working for your interests as well as their own, you don't have trust and you don't have much of a stock market.
Having established this cardinal principle, let us examine how closely the Shanghai stock market reflects the booming fortunes of the mainland's economy.
The blue line in the first chart gives you the mainland's nominal gross domestic product set to an index base of 100 for January 2000. The red line gives you performance of the Shanghai Composite Index on the same basis.
They make much in Shanghai of how their stock market has risen some 20 per cent since mid-July but, in the context of the mainland economy's growth, it's still only a molehill on Mount Everest.