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China’s Stock Market Tops $10 Trillion First Time Sin...

Business Maverick

Business Maverick

China’s Stock Market Tops $10 Trillion First Time Since 2015

Investors stand at trading terminals in front of electronic stock boards at a securities brokerage in Shanghai, China, on Friday, Oct. 13, 2017. A number of economic indicators show "stabilized and stronger growth" and the momentum of a 6.9 percent expansion in the first six months of 2017 "may continue in the second half," People's Bank of China Governor Zhou Xiaochuan said. Photographer: Qilai Shen/Bloomberg
By Bloomberg
13 Oct 2020 0

Chinese domestic equities are worth more than $10 trillion for the first time since 2015, when a record crash erased half the market’s value in months and saddled millions of investors with losses.

The world’s second-largest stock market has added $3.3 trillion since a low in March, helped by Beijing’s policies to encourage trading, a flurry of new listings that arrived with eased rules, and the strengthening yuan. Stocks have been close to the $10 trillion milestone since July, when China’s government acted to tame a speculative rally that had suddenly pushed a gauge of large caps near a 12-year high.

The country’s total market capitalization is now $10.04 trillion and just shy of the all-time high, according to data compiled by Bloomberg as of Monday. The U.S. has the world’s most valuable stock market at $38.3 trillion.

“It’s a meaningful number, especially coming after a pause in the stock rally,” said Hao Hong, chief strategist for Bocom International in Hong Kong. “It’s possible China’s market value can expand faster now that market reforms like the registration-based IPO system are in place.”

China market capitalization has once again hit the $10 trillion level

Chinese shares rallied after a long holiday break on optimism the government will introduce reforms to turn the region around Shenzhen into a global technology hub and that the ruling Communist Party will introduce policies to stimulate demand when it holds a major meeting later this month. Equities surged over the summer as margin debt climbed at the fastest pace since 2015 and turnover soared.

The CSI 300 Index of key stocks listed in Shanghai and Shenzhen slipped 0.2% as of 10:17 a.m. on Tuesday, paring its gain in 2020 to 17%. That rally tops the world’s major benchmarks.

Read more…
China Stocks Jump on Hopes Xi Will Announce Reforms in Shenzhen
Xi Trip to Hong Kong’s Doorstep Shows China Plan to Unify Region
Debutant Soars 2,932% on China’s Already Sizzling Tech Board
What China’s Newest Tech Bourse Has Achieved So Far: QuickTake

China has added a new stock venue since 2015, with the Nasdaq-style Star market launching in Shanghai in July last year. Regulators waived rules on valuations and debut-day price limits for shares on the board. In August this year, a batch of 18 firms traded for the first time on the ChiNext Index under so-called registration-based initial public offerings, surging by an average 212% by the close.

A stronger yuan has also helped equities. China’s currency rose 3.9% last quarter, the most in 12 years. That advance has prompted the central bank to restrain the yuan’s rally while stopping short of encouraging declines.

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