An investor sits in entrance of a board displaying inventory data at a brokerage workplace in Beijing, China, on this December 2018 picture. Reuters-Yonhap
By Lee Yeon-woo
Korean traders are parking their money in Chinese language shares once more following the Chinese language authorities’s introduction of stimulus measures, resulting in inventory holdings reaching their highest degree this 12 months.
Based on the Korea Securities Depository, Thursday, the worth of shares held by home traders within the Shanghai and Shenzhen inventory exchanges reached $956.8 million final month, setting a brand new annual file. This marks a rise of $153.23 million in comparison with the earlier month.
Together with Hong Kong, whole holdings of Larger China shares in September recorded $2.99 billion, additionally the very best degree this 12 months.
The rebound in Chinese language inventory holdings final month, after 4 consecutive months of decline since Could, is attributed to the sharp market rise.
On Sept. 24, the Folks’s Financial institution of China rolled out stimulus measures, corresponding to slicing coverage charges and mortgage charges, together with decreasing the financial institution reserve requirement ratio by 0.5 share factors for liquidity. 800 billion yuan ($113.7 billion) might be injected as effectively to bolster the inventory market.
The announcement attracted important consideration from overseas traders, who had beforehand shifted their focus to different rising markets, corresponding to India.
From Sept. 23 to Monday, the final buying and selling day earlier than Chinese language Nationwide Day, the CSI 300 — an index composed of the highest 300 firms by market cap listed on the Shanghai and Shenzen inventory exchanges — rose by 25.06 %.
Hong Kong’s Dangle Seng Index additionally elevated about 25.21 % from Sept. 23 to Thursday. This marks the primary time that the index has soared above the 8,000 degree since February 2022.
The market anticipates that the upward development in Chinese language shares will persist in the meanwhile.
“There’s a likelihood the market might surpass its earlier peak after reopening, with fiscal and actual property stimulus measures anticipated to be introduced following China’s Nationwide Day vacation,” Meritz Securities analyst Choi Seol-hwa mentioned.
Nonetheless, market volatility is probably going because of this short-term surge, particularly if revenue taking happens, market watchers mentioned. Korean particular person traders have additionally bought 12.3 billion gained ($9.28 million) value of Larger China shares since early September, in search of income.
The brokerage trade believes that for the upward development to be sustained for the long run, clear indicators of an financial restoration should emerge. They emphasize that basic points weighing in the marketplace, corresponding to the true property droop and weak home demand, have to be addressed.
“Latest measures have clear limitations in driving the V-shaped restoration or serving to the Chinese language economic system escape deflation by themselves,” iM Securities analyst Park Sang-hyun mentioned.
“Nonetheless, key monetary leaders holding a press convention to market stabilization measures alerts a shift from China’s earlier lukewarm responses. That is anticipated to contribute to the short-term market restoration. Furthermore, the probability of extra monetary stabilization efforts, together with measures geared toward actual financial restoration, has considerably elevated.”
