Few Afloat in Shanghai Market

SHANGHAI -- At one of Shanghai's most exotic brokerages -- a converted Russian Orthodox Church -- small investors who dived into the bull market of 1992 and 1993 are struggling to stay afloat. "The water's up to here," said one disgruntled investor Tuesday, holding one hand just below his nose. They are ready to blame anybody, from securities authorities to the mass media, for a 17-month decline that has seen the A share market for domestic investors collapse by 73 percent since its high in February last year. "They are all workers here," explained one punter, or long-shot investor, gesturing towards the shabbily dressed crowd at the back of the church. "They don't have that much money."Most of Shanghai's high rollers, with their portable telephones and gold Rolex watches, have already abandoned the crumbling market, often with the help of timely inside information. Less well-connected investors can do little but watch their investment evaporate. The bear run has swept away the life savings of many local families. In brokerages all over Shanghai, where eager speculators once elbowed their way to the buying counters, only a smattering of small-time punters now watch prices flicker on the quotation screens. Many are unemployed or retired, with nothing better to do with their time. At a branch of the Shenyin Securities Co., at least one investor was not too concerned about the slump. A laid-off factory worker in his early 40s, who gave his name only as Zhu, he can afford to sit out the bear market calmly. Zhu got out of shares just in time and claims to have made money -- a rare feat in recent months. Now he trades for the short term, a strategy market regulators deplore as "speculation and profiteering." "Shanghai is a speculative market, like Taiwan. Long-term investors have lost a lot," he said. He said most investors had bought too recklessly when the bull market seemed destined to last forever. "They thought that, if the market rises, it is going to keep rising. That will not do. When it goes up, I run." Like many, Zhu blames an excess of new offerings that has overwhelmed the exchange. "There ought to be new issues, but the speed now is too great," he grumbled. Many investors are also angry at the city's mass media, especially a popular financial program on Shanghai People's Broadcasting Station, for raising false hopes during the boom when it offered hot investment tips. "The radio station cheats people," one bystander said. "As soon as you buy a stock, it goes down." "They are not objective. It is no good," said another. At the former Russian Orthodox Mission Church, now occupied by the Shanghai Trust and Investment Co., a 69-year-old retiree, who has lost more than 10,000 yuan ($1,150), says he is mystified by the bear market. "The international situation is good, the domestic situation is good but the market is no good," he said, gazing at the big board above what was once the church altar. "I don't understand it."