Although the Shanghai composite index tumbled 6.5% on Wednesday following the news that the China’s Ministry of Finance had tripled the stock trading tax to 0.3%, fund managers said they don’t expect the move will entirely stall the country’s exceptional, 1-1/2-year bull run, Reuters reports.

Investors will continue to turn to stocks and mutual funds due to negative real interest rates on the $2 trillion held in bank savings accounts, managers said. In addition, there are still plenty of blue-chip companies in China with strong earnings outlooks.

“The market is unlikely to change its direction just because of the stamp duty thing,” said Li Sheng, chief equity investment officer at Galaxy Asset Management. “This is only aimed at increasing the transaction cost for speculators. The government just doesn’t want to see too much speculation. I don’t think the tax will change funds’ long-term view.”

The chief investment officer at a major Chinese fund management company agreed: “This is not going to be the end of the bull run, as you’ve got negative real interest rates, and inflation is picking up again because of rising pork and egg prices. There is way too much money looking for yield.”

The government resorted to a higher stock trading tax since interest rate hikes failed to curb the market mania prevailing throughout the country, analysts said. Currently, there are 100 million securities accounts in China, and retail investors account for 80% of daily transactions.

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