Stock market and economic overheating
Among the around 1,500 listed companies in Shenzhen and Shanghai, 20% have doubled their market value over the past three months. The P/E ratio (price/earning) of more than 30% of them reaches as high as 100 in the first season of this year. Last week, the daily turnout was 200 billioin yuan. The total turnover of this season is 7.6 trillion yuan, 85% of the total volume in 2006. Yet many blue chips did not go up and some even went down. But for some reasons, many small companies attracted investors at lot. It is believed that this is the sign of a coming dramatic adjustment.
The economic overheating seems to continue. According to the State Information Centre, GDP of the first season is 11%, higher than expected.