MNI China Press Digest, July 7: Stock, Securities Licence

     BEIJING (MNI) - The following lists highlights from Chinese press reports

on Tuesday:

     China's four major state-owned financial media outlets all published front

page articles on the domestic stock market rally today, calling on market

participants to be rational. Securities Times said that investors, particularly

small and medium-sized investors, should give up on the get rich overnight

mentality and should always remember the word "risk". Securities Daily said the

stock market will be a "structural bull" in H2 rather than an "overall bull",

which means some lower valuation companies would see their share prices recover

while others in sectors such as tourism, aviation and food catering should see

their shares decline.

     It is only a matter of time before some Chinese commercial banks will be

able to obtain securities business licences, China Securities Journal reported

by citing anonymous sources. The government may grant banks a licence or ask

banks to acquire securities firms with financial risks, a source working with a

securities firm told the Journal. The source, however, did not expect a large

number of commercial banks would obtain licences. Lian Ping, the chief economist

with Zhixin Fund, told the newspaper that if banks could invest 5% of their

capital into the securities industry, the total net assets of securities

companies would increase by 50%.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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