The Shanghai stock market regards the Lunar New Year quite seriously. In fact, so seriously it will be closed for a whopping three weeks this year. Granted, time will be spent between feasting and fireworks tinkering with the computer systems to ensure an even longer holiday is not required when the Year 2000 (Y2K) problem kicks in. But you might think that since the exchange opened only last year that Y2K bugs might have been worked out then. After all, it is not as if the year 2000 suddenly reared its ugly head. Analysts say that the stock market, like a losing tennis player who repeatedly calls for time outs, is using the Y2K bugaboo and the holiday for some respite to lick its wounds and hope for a miracle. 'With market sentiment really low for both A and B shares - B shares have never been lower - it's really just an excuse to buy some time,' said one Shanghai-based analyst with a Hong Kong firm. 'There's some hope that controls on B shares might be loosened by [Premier] Zhu Rongji and in fact rumours of this recently drove the Hong Kong market up by 4 per cent.' The National People's Congress will be meeting early next month to discuss, among other things, ways of reinvigorating the mainland's flagging economy. If a decision is made to loosen controls on B shares, then it is hoped that word would leak out in time to boost market sentiment. Wishful thinking has it that these leaks will happen just as the Shanghai market's long recess will be ending, providing a timely kick with which to begin the new year. If this sounds a little cynical, not to say desperate, that is because it is. Local mutual funds, which are required weekly to report their net asset value (NAV), announced on Monday that all were losing money, said the analyst. Another analyst said that, as of this week, more than 70 companies trading on the B market, supposedly reserved for foreign investors, had issued profit warnings heralding 'significant losses' compared with only 41 at this time last year. The analyst said she was 'quite concerned' with the state of the market. 'Even if the government loosened controls on B shares, it might not make much of an impact, as about 80 per cent of the B shares that are now traded are traded by Chinese punters, not by foreign investors,' the analyst said. Local investors, she said, could easily circumvent restrictions by registering with foreign names or using offshore companies. Describing restrictions governing the B-share market as quite 'grey', she said a proposal was put forward at a recent Shanghai People's Congress to allow local investors to participate legally in the B-share market provided they provide guarantees not to cheat on foreign exchange. The market traditionally closes for two weeks at the Lunar New Year so the extra week's holiday this year will be spent ensuring that the Y2K problem does not cause chaos at the year's end. The mainland, because it has many different computer operating systems, including some very old ones, is much more vulnerable to the Y2K bug than Hong Kong. Nevertheless, other bourses around the world have managed to test solutions for Y2K problems at night or on weekends. One financial expert expressed amazement that the Shanghai stock market would close its doors for three full weeks. 'When the New York Stock Exchange closes unexpectedly for 15 minutes people go berserk,' he said. 'It just goes to show how disconnected China's economy is from the rest of the world.'