Stamp tax may not deter investors

Analysts are skeptical of the government's efforts to curb additional investments in the stock market, even after the Shanghai Composite Index closed at 4053.08 Wednesday, dropping 6.5% in response to a surprise tripling of China' stamp tax, the Wall Street Journal reported. The dip was the index's second-biggest drop this year, but prices are still 46% higher than they were after the 8.8% plunge in February. Analysts believe the cost of the tax will remain a marginal consideration for many investors in the US$2.5 trillion market, as many saw yesterday's decline as a buying opportunity, judging by the near-record US$54 billion in activity and the fact that stocks never fell by the 10% downward limit and finished above the intraday low. Without future deterrents such as the introduction of stock futures by the government, which would make it easier for investors to make money even if prices fall, the market is likely to surge again, analysts said.