Olympic Success Cannot Lift Shanghai Stocks

Posted by: Frederik Balfour on August 19, 2008

It sure looks like even China’s mighty Olympic gold medal tally isn’t enought to lift investor spirits in China. The Shanghai Composite Index touched a new 20 month low on Tuesday of 2284 points, and is down more than 55% this year, having skidded several perentage points since the Games began. Plunging corporate profits and uncertainty over whether Beijing can keep the economy steaming along at historical rates while the rest of the world is flagging is keeping share prices depressed. Maybe after the closing ceremony at the Bird’s Nest the Chinese government will come up with a financial version of the Project 119 to lift the stock market out of its doldrums.