It is feared the heavy volumes could destabilise nation's brokerage systems
The Shanghai Stock Exchange warned yesterday that record trading volumes could destabilise the country's electronic trading systems, joining a growing chorus of government regulators in talking down China's red-hot stock market.
Turnover on the Shanghai exchange in the first 14 trading days of this year reached 1.2 trillion yuan, a massive increase from 2005, when trading for the entire year reached 1.9 trillion yuan. Turnover for the whole of last year reached 6 trillion yuan, according to Shanghai exchange figures.
'We must pay close attention to risks in the market, most importantly whether the technology system and trading platform will be able to handle such large trading volumes,' the governor of the exchange, Geng Liang, said in a statement.
However, the stock market appeared to shrug off the latest warning yesterday, and Shanghai's benchmark index closed up 2.18 per cent at 2,945.26 points, on heavy turnover of 131.4 billion yuan.
Trading volumes have repeatedly hit record highs in recent weeks as the market continues a winning streak that saw benchmark indices rise more than 130 per cent last year, making it by far the best performing major market in the world last year.
Rising prices, combined with a flurry of huge initial public offerings, pushed the total market capitalisation on the country's main exchange from 2.3 trillion yuan to 7.2 trillion yuan.