THE Chinese Government won’t directly interfere in the domestic stock market, a central bank adviser was quoted as saying yesterday.

Some securities analysts and fund managers have said the government might take stronger measures to rein in the current bull run in the stock market and drive out speculative money.

The Securities Times quoted Fan Gang as saying the latest monetary tightening moves were largely aimed at reducing money supply and excess liquidity in the economy rather than in the stock market itself.

“The government is not going to take steps to support or intervene in the stock market. The market will be left alone to undertake its own risks,” said Fan, a member of the central bank’s monetary policy committee.

“The market is getting mature and so is the government.”

China’s stock market shrugged off the central bank’s decision Friday to raise bank interest rates and reserve requirements, ending up 1 percent Monday and 1.02 percent yesterday, fuelling concerns more market-cooling steps may be on the cards.

In 1996, the government halted a bull run in the domestic currency A share market by using the People’s Daily, the Communist Party’s mouthpiece, to warn in an editorial against “excessive speculation.”

Early this month, central bank governor Zhou Xiaochuan said he was concerned by a stock bubble and would monitor asset prices.

Fan was quoted as saying that the central bank always kept a close eye on asset prices when it came to drafting monetary policies because fluctuations in asset prices will lead to fluctuations in the economy, a key lesson of the 1997/98 Asian economic crisis.

China’s inflationary pressure was easing due to softening grain prices, but the possibility of a sharp rebound could not yet be ruled out, Fan said.

(SD-Agencies)

The Shanghai-listed shares of some companies -- such as top domestic insurer China Life -- often trade about 30-50 percent higher than their Hong Kong counterparts, or sometimes as much as several-fold more.

“The value of A shares is much higher than H shares and it’s unreasonable, since the A and H shares of a company have the same rights and receive the same dividends,” Lee told reporters.

Lee’s comments came after Li Ka-Shing, Asia’s richest man and the chairman of Cheung Kong (Holdings) and Hutchison Whampoa, expressed concern Thursday the mainland market was overheating and that its inevitable correction would spill over to Hong Kong. Earlier this month, Larry Yung, chairman of CITIC Pacific, also said that current price-earnings multiples in the A-share market were too high.