Chinese stock market surges 27% in just one month! How long can this upswing last? Expert insights https://t.co/iTyshYVVF0
— ET NOW (@ETNOWlive) October 8, 2024
A surge of young investors in China is actively entering the stock market, eager to benefit from the most significant rally in almost 20 years. The increase in new accounts from individuals under 30 on popular trading platforms and a spike in inquiries from novice investors to brokerage firms showcase a revitalized passion for stock market participation. However, these first-time investors are assuming considerable risks, as the recent market uptick has been primarily fueled by governmental policy changes and requires additional government support for continued economic stability.
LIVE | Insights from Steve Englander of Standard Chartered Bank regarding China’s market reopening after a week-long pause. @StanChartIN @_anishaj @AyeshaFaridi1 @avannedubash
— ET NOW (@ETNOWlive) October 8, 2024
The unpredictable nature of the market was showcased on Wednesday when stocks noticeably declined after a 6 percent increase the prior day. For many young individuals in China, choosing to invest signifies a major transition from the bleak economic conditions they have witnessed throughout their adult lives. The excitement of possible gains has now overshadowed the previous anxiety regarding a stagnant stock market.
In the last fortnight, young Chinese have eagerly jumped into stock trading following Beijing’s boldest measures yet to stimulate economic growth and encourage consumer spending.
Free link: https://t.co/DGLnUdFiNw— John Liu (@JohnLiuNN) October 9, 2024
Tan Zhiming, an account manager at Northeast Securities, highlighted the influx of new clients, most of whom are venturing into investing for the first time. Following the reopening of onshore markets post-holiday, brokerages and stock exchanges across China are gearing up for a bustling trading period. There is heightened optimism that the stimulus measures from Beijing will further uplift stock prices.
Employees in various sectors at local brokerages have opted out of vacations to handle the anticipated surge in market activity.
BREAKING ?: Chinese Stocks soaring over 10% and on course for their most remarkable day in decades ? pic.twitter.com/mePLZ0oYlh
— Barchart (@Barchart) October 8, 2024
Leading brokerages have witnessed an unprecedented number of account openings during the Golden Week holiday, driven by immense client interest both digitally and in-person. Staff at the China Securities Depository and Clearing, along with stock exchanges, have worked throughout the holiday to prepare for the oncoming wave of new registrations and system tests.
Additionally, the rally in Hong Kong’s stock market during the holiday has heightened expectations that the onshore rally will persist.
Young Chinese investors enter the fray
Retail investors throughout China are once again engaging in stock discussions during family gatherings, with many expressing intentions to purchase shares after years of dormancy in their trading accounts.
Authorities are actively implementing measures to facilitate seamless trading and prevent technical issues similar to those that occurred in late September. Recent data indicates that revitalization efforts in the property sector are bearing fruit, with skyrocketing sales of new homes in cities like Beijing and Shenzhen. Nevertheless, some investors tread cautiously, still wary from past market setbacks.
Markets are poised for a briefing from China’s leading economic adviser on Tuesday about initiatives aimed at enhancing economic growth. Anticipations of positive performance in the onshore market are backed by optimistic sentiment and the fear of missing profitable opportunities. The robust resurgence of the A-share market, buoyed by unexpectedly vigorous stimulative policies, has reinforced investor assurance.
The Shanghai Stock Exchange has rolled out an additional trading window aimed at accommodating the influx of newly registered retail investors and enhancing trading efficiency. Securities brokerages are reporting a substantial rise in request for account openings, with some offering 24/7 online services during the holiday. Investor confidence has been strengthened following the A-share market’s impressive rebound, with significant gains noted in the Shanghai Composite Index and Shenzhen Component Index.
Experts suggest that increased household savings in China could supply additional capital for the A-share market, thereby propelling further upward trends. Given that the Hong Kong market has already surpassed the A-share market due to lesser holiday disruptions, it indicates a probable sustained rally for the A-share sector. While analysts caution about potential market fluctuations and adjustments, they concur that the bullish trend remains unbroken, signaling a prolonged period of market increases.
