A boom in China’s stock market this year has delivered limited support to a rapidly cooling economy, helping cash-starved small firms raise funds but failing to boost consumption.
The blue-chip CSI300 index has shot up 30 per cent from January to April in what local analysts call a "crazy bull run", while equity fund-raising by Chinese firms has jumped 85 per cent from a year earlier in the first quarter, data showed.
But the anticipated spillover effect of rising stocks into the real economy has so far not materialised.
Annual retail sales were up only 10.6 per cent for the quarter, lagging expectations, while consumer inflation was only 1.2 per cent - both metrics showing few signs that the booming market is supporting consumption, analysts say.
"The market’s boom has made corporate fund-raising easier, particularly for small and medium-sized companies," which are shunned by banks for loans, said Guo Yanling, senior stock analyst at Shanghai Securities.
She added that Chinese investors do not usually take profits until future speculative gains appear unlikely, partly because equity prices are still largely policy-driven.