Stocks unlikely to drop on new regulations

The central government is likely to push ahead with regulations to reduce risks in the stock market, but experts said the measures will likely only have a limited impact on share valuations, domestic media reported.

Experts suggested that investors pay close attention in the first half to blue- chip stocks in sectors such as healthcare, steel and chemicals, as well as shares in emerging industries, according to a report by the China Securities Journal on Saturday.

Experts also advised investors to take a hard look at sectors related to the “One Belt and One Road” initiative, such as cement and construction equipment.

However, there are growing risks in the market. The government has been approving IPOs at a faster pace, which might take a toll on over- valued small caps, the report said. Uncertainties in overseas markets are also a potential risk factor to the domestic stock markets.

However, some experts believe stocks will gradually rise in the coming weeks, with the benchmark Shanghai Composite Index likely to reach 3,400 points, according to a report by stock information provider hongzhoukan. com on Saturday.

Chinese mainland stocks were largely unchanged on Friday as reform hopes underpinned the market. The bluechip CSI 300 index was unchanged at 3,473.85 points.

The Shanghai Composite Index crept up 0.06 percent to 3,253.43 points on Friday, rising 1.60 percent for the week. The Shenzhen Component Index closed 0.11 percent higher at 10,443.73 points on Friday, up 2.41 percent for the week.

ChiNext, the country’s NASDAQ equivalent, closed up 2.95 percent for the week.

“Market sentiment remains optimistic and the upward trend is not yet broken,” Reuters reported on Friday, citing Wu Kan, head of equity trading at Shanshan Finance. “The upcoming National People’s Congress and the first- quarter earnings season will keep investors excited.”

China’s outstanding margin loans have risen for four consecutive days to exceed 900 billion yuan ($ 131.11 billion), as investors are likely to use borrowed money to buy stocks, according to Reuters.