Surging Chinese stock market turnover fuels optimism that long-awaited bull run is on the horizon
- Mainland investors have been biding their time amid concerns over the sustainability of economic recovery
- But a recent increase in turnover ‘signals that a new bull market is about to take off,’ says Yingda Securities’ chief economist Li Daxiao
The combined trading value in the domestic market has topped 1 trillion yuan (US$150 billion) for three consecutive days so far this month, after intermittently hitting that level in late March, according to Bloomberg data. About 1.3 trillion yuan (US$190 billion) worth of shares changed hands on the Shanghai and Shenzhen stock exchanges on April 4, the highest since last June.
“The surging A-share turnover signals that a new bull market is about to take off,” Yingda Securities’ chief economist Li Daxiao said in a social media post on Thursday. As China’s economy rebounds, the market will climb steadily after the recent consolidation, he said.
The CSI 300 Index tracking the largest onshore companies has retreated 2.5 per cent since a January peak, narrowing the gain since October to 17 per cent.
That made A shares the worst performers of the reopening play – stock bets based on China’s reopening after years of strict anti-pandemic measures. Their Hong Kong and US-listed peers have surged 39 and 54 per cent, respectively, during the past five months.