Gathering in a huge meeting room in the downtown Beijing Focus Hall, more than 300 men and women, young and old, are listening intently to a stock investment forecast for 2007. It has been years since Zhang Yichi, a fund manager with China Asset Management, has seen so many people crazy about the stock market.

"I am puzzled because the market has climbed to such a high level, and there's no sign of its stopping." A woman raises a concern with Zhang: "I am afraid of buying in on such a high level. There will be no room for margin."

"I bought some funds in April, and you know what, they doubled in value," Yu Na, a young woman, who works at an Internet company says. "I should have put more money in," she says with regret. "I am afraid the steep rise will not happen again."

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For those who have heard about friends, colleagues or acquaintances doubling their money recently by buying stocks or funds, the coming year is suddenly getting great attention.

Zhang gives his answer to investors curious about stock market returns: "The return for mutual equity fund investors is likely to be around 20 to 25 per cent in 2007," he says confidently.

Blue chip power

Starting at 998 points, the Shanghai Composite Index has risen more than 100 per cent since the beginning of this year. In the past month, the index has breached the psychologically important level of 2,000.

Analysts like to call it a "burst after five years' slump." And for investors, it is a switch from hell to heaven.

The Shanghai & Shenzhen 300 index, composed of 300 blue chips, has climbed 41 per cent since the beginning of the year. The Shanghai 50 index, comprising 50 major blue chips in the yuan-denominated A-share market, rose by 49 per cent. Both indexes surpassed the Shanghai composite index, indicating that investment capital is flowing into blue chips.

As China's stock market continues to climb, nobody can predict where the rally will finally end. But for 2007, at least one thing is certain it will be a year for blue chips.

By October, the Shanghai exchange had witnessed 47 initial public offerings (IPOs) after the government lifted a year-long ban. The IPOs for banking blue chips Industrial and Commercial Bank of China (ICBC) and Bank of China were widely over-subscribed.

For 2007, the market is expecting major IPOs such as China Life, China's biggest lifer insurer; PetroChina, the country's largest oil company; and Bank of Communications. Already listed overseas, the companies now plan to list in China .

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