Stocks rebound from stamp tax dip
1 June 2007
The Shanghai Composite closed at 4109.06 yesterday, 41.4% up from the slump, shares up as high as 3% trade despite the market's fall of 6.5% on Wednesday, after the government initiated a triple-increased stamp duty on trading, the Financial Times reported. The market rebound was not good for the government, who was hoping for a gradual decline in share prices. Although analysts said it was too early to fully assess the reaction of investors to the tax rise, a
total of 426,000 new trading accounts were opened on Wednesday, one of
the highest ever daily figures, indicating many new investors have not been put off by the government measures. The country's underpriced initial public
offerings led to rapid increases in share prices, and resulted in the government losing
several billion dollars in potential revenue, the World Bank said.