Beijing's successful bid will only have a short-lived impact on the bourses, but the long-term fallout is expected to be far-reaching, analysts said yesterday.
Li Sen of China Securities Co. said the euphoria over winning the Games is likely to be short-lived.
"Though the successful bidding will have a positive psychological impact on the investors and boost their investment confidence, the market is not likely to see a big lift because it is already at its peak," she said.
The Shanghai Composite Index, which covers both yuan-denominated A shares and hard-currency B shares, finished 0.19 percent lower at 2161.34 yesterday, 72.25 points short of the record high set more than two weeks ago.
Market watchers said investors were actually waiting to hear about the imminent sale of state-held shares in listed firms as well as the eventual listing of Sinopec, both of which might have a negative influence on the market, Li said.
In September 1993, Australian stock market surged to a whopping 10 percent in less than a month after Sydney was declared the host for the 2000 Games. Much of the buying was in real estate and construction sector.
However, China is unlikely to see a similar euphoria, said Wu Kan of Shanghai Securities Consulting Co.
"Films to benefit from the successful bid are already at an peak after Beijing was seen as a favorite to win the race. The market in fact is ready for corrections and that is expected in next couple of days. Even if they continue to gain ground in the coming sessions, the overall market will not benefit much, because of their small weight in the index," he added.
There was not much movement in these sectors in yesterday's trading.
Beijing Urban Construction Investment & Development Co. dipped 0.77 percent to 16.85 yuan and Beijing Capital Co. shed 0.37 percent to 21.47 yuan.
Beijing Urban in fact has gained 16 percent in just one month, while Beijing Capital surged 14 percent in the same period.
However, Wu said companies will gain in the long term, eventually pushing up the broader market.
"As the Olympic Games have a far-reaching impact on the economy, varied sectors will be bolstered. We will find more and more firms becoming beneficiaries, especially the property developers and tourism-related companies," he said.
According to a report by U.S.-based investment bank Goldman Sachs, China will achieve an additional 0.3 percent annual economic growth from 2002 to 2008, largely because of yesterday's success.
"It will be a great contribution to the economy and the balance sheets of listed firms should also be consolidated," said Li Rong, analyst of Shenyin & Wanguo Securities Research Institute.
(Eastday.com.cn 07/15/2001)
