China’s securities markets were boosted in the first half of the year by more participation from investors and public offerings, the People’s Bank of China said in its monetary policy report for the second quarter on Wednesday.

According to the report, Chinese enterprises have raised a total 191.3 billion yuan (US$25.3 billion) so far in 2007 from the A-share market through IPO or additional share offers, up by 420 percent year-on-year.

Meanwhile, the total trading value of the mainland stock market reached an all-time high of 23.7 trillion yuan, 2.6 times of the whole year figure of 2006. Average daily turnover grew by 520 percent year-on-year and reached 202.7 billion yuan.

Attracted by the bullish market, investors opened 28.61 million stock trading accounts in the first half, 5.4 times more than the whole of 2006. Many of them turned to mutual funds, creating a boon for fund companies.

Twenty-nine new mutual funds were set up in the first half of the year with an additional capital of 638 billion yuan. By the end of June, the net worth of all mutual funds in mainland’s market reached 1.8 trillion yuan, increasing by 252 percent year-on-year, according to the report.

In addition to the rising stock market, the report also shows an upward trend in loans and demand deposits.

Outstanding loans to households rose 25.7 percent year-on-year to 4.6 trillion yuan. Medium and long term consumer loans, in particular, achieved a further increase of 320.6 billion yuan over last year’s growth due to surging property purchasing needs.

The report found that demand deposits are preferred by both enterprises and households. By the end of June, the increase of demand deposits from households grew by 40.4 billion yuan from a year earlier. However, the increase of fixed deposits is 634.3 billion less year-on-year.

Copyright Fund China 2009.

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