The record number of A-share accounts represents a 56 percent increase from the 3.08 million in the whole of 2006, according to China Securities Depository and Clearing Corp Ltd.

The company also said that 3.74 million new fund accounts were opened between January and March, increasing China's total A-share, B-share, and fund accounts to 87.25 million at the end of March.

As a result, turnover on China's Shanghai and Shenzhen stock exchanges has expanded rapidly over the past three months, hitting a record high of 224.41 billion yuan (US$29 billion) on Wednesday.

Analysts said the excessive liquidity had provided strong growth momentum for the country's equity markets. The benchmark Shanghai Composite Index closed at a record high of 3,291.30 points on Tuesday, surging 20.6 percent this year.

According to Shenyin Wanguo Securities, new money keeps flowing into the markets amid expectations of rosy corporate earnings and despite concerns about overheated equity markets and possible fluctuations, like that of February 27, when the key Shanghai index plunged 8.84 percent, the biggest single-day drop in a decade.

Shanghai-listed shares were valued at 45.17 times earnings on Monday, more than double the 18 times in the same period last year.

US investment bank Goldman Sachs earlier warned that if the price/earnings ratio exceeds 25 times, share prices are over-valued.

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