China’s stock market suffered a trillion yuan loss in the first half of 2008
The Chinese Mainland stock market has been declining continuously and has broken a record loss in history in the first half of 2008, reaching one trillion RMB yuan.
According to Shanghai “International Finance News”, interim reports completed by various funds disclosed a huge loss of funds in 2008. The reason for the tremendous loss is derived from the steep fall of A-share market funds as well as the Fund’s management style and Huan Shou Lv (refering within to certain units of time, a ratio between total securities trading volume and the possible volume of transactions) that has also become one of the important elements in determining fund performance.
The report said the data shows that 364 funds operating under 59 fund companies had suffered a net loss of 1.08 trillion yuan in the first half of the year, the highest record over that of the same period of previous years. After removing liquid loss, the actual deficit of the current fund amounted to 101.4 billion yuan. Among all types of funds, money market fundng is the one that maintained the positive earnings in the first half of 2008 with a current profit of 1.297 billion yuan.
The report had shown that the funds from the 3 trillion age falling into two trillion era attributes to Huan Shou Lv, a factor that is not to be ignored.
A report has quoted experts’as saying that a separate inspection of the stock turnover rate can only indicate the frequency of transactions that has no direct logical link to fund performance, but statistically there may be some degree of relevance. A 2008 Interim Report also proved this point that in the first half of 2008 the company’s Huan Shou Lv had correspondingly declined.
The report said the data had shown that in the first half of the 2008 stock turnover rate of various funds compared to the same period in 2007 had seen a more substantial decline, or even lower than that of 2006. Huanshou Lv of closed-end funds and stock-based open-end funds are below 200 percent, Huanshou Lv of the open-end balance fund is also about 214 percent, showing a significant decline compared to the 300 percent of Huanshou Lv in the same period last year.
The above news is brought to you by Gao Yun and hosted by Chris Thomas for Inside China Today on SOH Radio Network.
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