China's Stock Market Rallies to Record High
This week, China's benchmark Shanghai Index closed over 6,000 points for the first time.
The Chinese market has more than doubled in value so far this year and sextupled in two years.
Some analysts say the Chinese stock market is heading for a significant correction, but Chinese investors continue to pour money into the markets.
After two consecutive days of record-breaking highs, the Shanghai Index dropped a bit Wednesday on profit taking, but remained over the 6,000 mark.
Analysts are increasingly certain that these astronomic highs are unsustainable and that a serious correction is around the corner.
Correction Likely Before Olympics
William Zheng, a senior council for the law firm Sheppard, Mullin, Richter & Hampton in Shanghai, said that while a correction is likely, investors seem convinced that China's government would not allow a stock market crash and spoil next year's Beijing Olympics.
"I think the last thing the Chinese government would do is to let its citizens complain about the market," Zheng said. "I do agree with the point that the market will not crash, but there will be a correction between now and the Olympics."
Flush with stock profits, China has seen a jump in the number of billionaires, going from just 15 last year to 106 in 2007, according to the Hurun Report, a list of China's wealthiest business leaders.
Investors who are hungry for new stocks will not be disappointed this year.
Big upcoming market listings include China Mobile, which has more cell phone subscribers than any firm in the world, and PetroChina, Asia's largest oil and gas company.
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