China to Raise Stamp Tax

That’s the stock trading 印花税 in Chinese. It was only a week ago somebody from department of finance denied the “rumor”, now they ate their own words. They raised rate from 0.1% to 0.3% for stock trade.

I don’t know how the market will react to this. Will it blush off like it did on May 21 amid the raise of interest rate? We shall see.

Seriously, I think the goverment could put those money (I mean increased stamp tax revenue) into education, and health care, that will be a wonderful thing. We all want a harmonious society, don’t we?   

Shanghai Composite Index 8000 ?

You know I am kidding, do you? We all know the bubble is there, but how much bubble do we got? Is bubble going to burst very soon? These are the questions the investors (more accurately speculators) in China should ask.

In my mind, there are fundamental reasons for this rising of Chinese equity values: over liquidity (too much money, too little stocks); improvement of company fundamentals including rapid growth; Gu Gai (the stock reform which remove cloud from the floating shares), etc.

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