Chinese market surge draws newbies

Chinese market surge draws newbies
PHOTO: Reuters

The group of young adults next to my table in a cafe tucked away in a quiet Beijing hutong (alley) was having a crash course on share trading.

A tablet was propped on the table. The "expert" among the group shared his knowledge with the rest, explaining various jargon and the recent trends.

He threw out the question: "Why did the share market surge vigorously lately?"

The red-hot Chinese stocks have attracted many newbies to play the market.

According to Chinese business news daily 21st Century Business Herald, an average of 600,000 new investors - equivalent to the population of a medium-sized city - entered the market every month since July last year.

A 27-year-old self-employed, who wished to be identified only as Lisa, was one of those who were spurred by the bullish market to open a share trading account.

She only started trading two weeks ago. With 110,000 yuan (S$15,000) as her capital, she chose her stocks purely on her whims.

"I just want to give it a try, and I am making profits so far," the Beijinger said, adding that she spends four hours a day to trade in the share market, selling in the morning and buying in the afternoon.

Wang Chao, who first dabbled in the share market in 2011, is devoting more time to monitor the share market recently.

"Investing in shares is about making money after all, and times are good now," he said.

Wang said he reads financial news and talks to like-minded friends to work out his trading stra­tegies.

He found himself paying more attention to current affairs as they have direct impact on the share market.

China's stock market has soared to stunning new heights this year. At US$5.9 trillion (S$7.89 trillion), the Shanghai Stock Exchange is the world's third biggest by market ­capitalisation in May, after the New York Stock Exchange at US$19.7 trillion and Nasdaq at $7.4 trillion, according to data from the World Federation of Exchanges.

Meanwhile, the Shenzhen Stock Exchange has a market cap of US$4.4 trillion, bringing the total in China's stock market to at least US$10.3 trillion.

Despite the bull run, William Chen remained cautious about the risks.

Market correction has reminded him to stick to his principles and not be overhasty.

He was honest about his motive to buy shares shortly after he joined the workforce in 2011.

"The salary I get from working in a state-owned enterprise is low and future career prospects are bleak. My goal is only to get enough returns so that my total income matches the salary offered by ­foreign companies.

"I am happy enough to earn 10,000 yuan to 20,000 yuan per month," the 27-year-old said.

A Malaysian working in Beijing, who preferred to be known as Szetoo, shifted his attention from the real estate market to stocks due to the stagnant housing market.

The financial controller finds great satisfaction from investing in stocks.

He enjoys selecting companies, analysing trends and identifies the right timing to invest in the stock market, while the stock market has trained him to manage pressure and greed.

"WeChat is my source of information, where many official accounts have been set up to disseminate information about the financial markets," the 38-year-old said. (WeChat is Tencent's popular social media service)

Having benefited from the stock market, Szetoo hoped for his friends to enjoy the same and achieve financial freedom.

He organised several sharing sessions in Beijing for those who are eager to learn more.

"I am honing my investment skills through sharing what I know with them," he explains.

Ong Ai-Lien, tempted by the potential returns, plans to start trading in small amounts to get herself familiar with China's stock market soon.

"It is also a great conversation topic among colleagues and friends," the 35-year-old consultant said.

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