Monitor | Mainland buyers don't share enthusiasm for China shares
Offshore investors have poured billions into mainland equities but the homegrown punters are sceptical, and they may have a point
Yesterday the mainland's most closely followed stock market index, the Shanghai composite, slipped 1.3 per cent, falling below the 2,000 mark to close at its lowest since the depths of the financial crisis in February 2009.
The index is now down 16 per cent over the last 12 months. To put that drop into perspective, it's a worse performance than either of the crisis-hit markets of Spain or Greece. Over the period, Madrid's benchmark Ibex index has fallen by just 3 per cent, while the Athens ASE index has actually managed to climb 26 per cent.
The latest slump in the mainland market will come as a bitter disappointment both to local regulators and foreign investors in Chinese equities.
Over the course of this year, mainland securities regulators have made repeated attempts to boost China's ailing markets. They have told investors that equities are a bargain, and pressed companies to buy their own stock, even allowing managers to offset the cost by paying employees in shares.
They have restricted the supply of equities by holding back new issues. They have given insurance companies greater freedom to invest in the market. And they have loosened the rules on margin trading, allowing investors to gear up.