China’s stock market brushed off a central bank warning about the danger of an asset bubble on Tuesday and rose to another record high in a sign of the government’s waning ability to control share prices. At least three state-run newspapers reported that Zhou Xiaochuan, the central bank governor, on Sunday expressed concerns about the prospect of a stock market bubble. His comments, the latest official expression of alarm about the level of the market, were ignored by investors, who bid up the index by nearly 3 per cent. In a market valued on 43 times trailing earnings and up an annual 47 per cent, China’s officials are indeed sitting on a bubble, says Lex. But if they want to move markets, they should try talking about when China’s artificially low currency peg will be revalued.

This entry was posted by Gwen Robinson on Wednesday, May 9th, 2007 at 5:54 and is filed under Capital markets, People. Tagged with china. Edit this entry.