Shanghai surprise! (not)
- PRC government triples the tax rate on trading shares (0.3% stamp duty from 0.1%).
- Shanghai market index drops 6%.
- Shanghai stockbrokers at a loss trying to explain the concept of a market fall to recent joiners who have only ever seen the market go up.
- Don’t worry lads – plenty more to come. The market is easily 200% overvalued, maybe more. Expect another 60-70% or so.
- Sad truth: Most of the newbies will see this as a second chance to buy shares ‘cheap’ and will continue to pile in.
Obtaiwan: Taiwanese and HK markets are down too, slightly.
UPDATE:
As you can see, that went well, didn’t it? Tripling trading tax resulted in … a mere 3 day setback for the insane bubbling of the Shanghai market. The numpties just piled right back in.
Posted: May 30th, 2007 under Finance & Economics, Taiwan.
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