Has the Shanghai stock exchange reached its bottom ?

Shanghai stock exchange

Making predictions on the road the Shanghai stock exchange is going to take is always tricky, since logic and whatever is happening elsewhere in the world has little influence on the value of its shares. The only solid way out is what Reuters does: you just include almost anybody who has an opinion, without giving any direction yourself.
Of course, record size IPO and dropping company results are not good news for any stock exchange, but the confidence of the ordinary investor in what the government's intentions are with the stock exchange is the only thing that matters.
That is different from what the government, in this case premier Wen Jiabao says. Over the weekend he announced that the economy is very strong and solid, an obvious mistaken PR-effort to talk up the markets. If he would not have told the opposite, repeatedly earlier this month, some people might have actually show some confidence. From the market reaction on Monday you can learn that the investors do not believe what Wen is saying.
Reuters:

The index's loss during the latest quarter was the second worst since China's modern stock market was established at the end of 1990. The market tumbled 20 percent over the past month, its largest monthly loss this decade.

The drop marked an end to one of the world's great equities bull markets. The index jumped over sixfold between June 2005 and last October as millions of Chinese flocked to the market for the first time, lured by an economic boom and reforms to the structure of state shareholdings in companies.

I still do not believe the economic crisis in the US has really much to do with the current slump in China's shares. Giving the buyers confidence in China's economic future would be the only way, but at this stage you would actually need a new premier to gain their trust again.

Update: More thoughts here.