The number of stock accounts in China’s A-share market exceeded the 200 million mark for the first time, indicating the growing attractiveness and influence of the Chinese capital market, together with the appreciating currency, the yuan, experts said.
The number of investors has been continuously increasing over the recent years and exceeded the 200 million mark as of Friday, latest calculation from the China Securities Depository and Clearing Corporation Limited (CSDC) showed.
The number broke through the 100 million mark in January 2016 and 150 million mark in March 2019.
China’s securities market attracted more than 19.63 million new investors in 2021, up 8.9 percent from the previous year, setting a new record since 2016, according to the CSDC.
“The active participation of investors in China’s A-share market is primarily thanks to the country’s robust economic growth in those years while reining in the COVID-19 pandemic effectively,” Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Saturday.
China’s GDP expanded 8.1 percent in 2021, the fastest pace recorded in nearly a decade and landing well above the government’s annual target of achieving a growth rate above 6 percent, also in a leading position among the world’s major economies.
The profitability of listed companies has improved over the recent years, which has also prompted more Chinese investors to enter the market. In addition, with the opening up of the A-share market and its continued expansion, more overseas investors have shown ever greater interest in the market, according to Dong.
Net inflows of funds through “northbound connect system,” or money invested from Hong Kong into the Chinese mainland through the stock connect programs, exceeded 400 billion yuan ($63.32 billion) in 2021 (hitting 432.2 billion yuan), indicating a bullish sentiment of overseas investors toward Chinese equities.
And, the younger generation, those who were born in the 1980s and 1990s, have become important investors in the market as the generally well-educated group holds more knowledge of financial management compared with their parents. The generation is also more willing to engage in betting high-risk assets such as stocks, experts noted.
Despite the geopolitical disturbances on the global stage, Dong says that potential investors who seek opportunities brought by the fluctuations are still willing to open new accounts.
Chinese stock indexes rose on Friday as buying by foreign investors boosted healthcare, new energy and consumer staples firms, after a broad sell-off on Thursday. A growing number of Chinese firms with business in Ukraine or Russia have said the impact from the region’s crisis is limited.
Investors monitor stocks at a trading center in Chengdu, Southwest China’s Sichuan Province. Photo: VCG
