A batch of media reported the words released by Dai Xianglong, governor of the People's Bank of China, on paying attention to and deterring the flow of the loan into the stock market. Apparently, Shenzhen and Shanghai stock market behaved ignorantly and closed up at the day end. Nevertheless, the future effect of this policy is worth of noticing, for loan policy is the key variable of the stock market.

First of all, the relative material testified that loan had been the main capital sources for the stock market. Presently, brokerages and the fund management companies have borrowed more than 100 billion yuan capital from the inter bank market while Shenzhen and Shanghai stock market have attained about 300 billion yuan loan from share hypothecation. How to tell the illegal and legal inflow of the loan will be the key of the policy. And it will be difficult to deal with during the practical implementation.

Then under the background of the imperfect legal person management structure of the listed companies, Chinese stock market showed a sharp characteristic of that the capital pushing up market of which bank loan is the great support. The capital from the monetary market could be regarded as the direct momentum of the bearish stock markets in Shenzhen and Shanghai. As the same, the outflow of the capital must result in the large correction of the indices. The main reason of the apparent ignorance of the market on Thursday is that the market has already responded to the policy beforehand. After all, the sense of this political information should not be underestimated.

(People's Daily 01/19/01)