The Chinese mainland stock markets closed higher on Monday, the first trading day of the New Year. The Shanghai Composite Index gained 60 points, and the Shenzhen Component Index climbed 149 points. Despite the strong start, some analysts predict the potential for the market to rise sharply in 2009 would be limited while others are rather more pessimistic. Our reporter Dan Dan has the details.

Reporter:
The bull market in 2007 lured countless investors in China to take bold action over the past year by putting their savings in the stock market. But most of them ended up seeing their money evaporate in the gloomy market.

Tian Gang, a fresh player in the market, saw his investment of 320,000 Yuan or nearly 47,000 US dollars shrink by half in the past year.

"Compared with many other investors, I feel I'm still very lucky. Most people suffered losses of more than 60 percent or even 70 percent of their investment last year."

In 2008, China's market value shrank from more than 32 trillion Yuan at the year's beginning to less than 10 trillion Yuan by the year's end.

As the new year has begun, most industry insiders have predicted that volatility remains a key word for the market in 2009, while the sluggish trend may continue in the first half of the year.
Du Changjiang, an analyst with China Merchants Securities, says a turning point in the market might appear in May.

"In the first quarter, the credit crunch in the United States would get further exposed. And in April, the situation of the junk bond crisis in the country would also be clearer. Therefore, if all these risks are fully released in the first four months, the stock market might see a turning point in May."

The analyst says the central government's target to keep the country's economic growth above 8 percent this year will benefit the stock market.

"The target will mainly influence the performances of listed companies. If without the target, we've estimated that the growth rate of these companies would drop by more than 25 percent. But, now with the target in place, the figure, we believe, would stand at around 20 percent."

But not all industry experts are that optimistic. He Jun, a senior analyst with Beijing-based Anbound Consulting Firm, says generally, there are still many uncertainties concerning the country's economy.

"The market, as a whole, would remain low, I believe. But, of course, it's absolutely possible, that the leading indicator will surpass the current level."

Earlier, the China Securities Journal has said the country's leading indicator is likely to hover between 1,300 and 2,600 points in the new year.

2009 marks the Chinese Zodiac Year of the Ox. While getting more rational about the market, many investors in China are also holding the belief that the symbolic meaning of the new year will make a bull market a reality.

Dan Dan, CRI news.