Chinese mainland stock markets will continue to be bullish ahead of the Beijing Olympic Games next year, a senior law maker said today.

 

The country's stock market will stage a “slow bull'' performance before the Olympics in August, said Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, in a speech delivered at Fudan University this morning.

 

The central bank should increase benchmark deposit rates while keeping lending rates unchanged next year in a move to reduce the momentum for lenders to extend loans and boost returns over savings, Cheng said.

 

Shrinking the interest margins for commercial lenders will also prompt them to diversify into more innovative businesses to shore up profits, according to Cheng.

 

The combined stock-market capitalization on China's mainland is expected to reach 60 trillion yuan (US$8.1 trillion) by 2020, Cheng said. The total market value in Shanghai and Shenzhen was 30.2 trillion yuan as of yesterday.

 

(Shanghai Daily December 6, 2007)