Beijing had signaled in the beginning of this month that it was time to buy China, investors did not hesitate. The investors had begin to worry when
During the initial four days of trading in July numerous investors from outside China poured a record $7.6 billion into the market, according to BNP Paribas, the French investment bank. The official warnings that followed prompted outflows of $2.5 billion in a single day a week later.
In the times of coronavirus pandemic, China’s recovery had offered a glimmer of growth. It had been noticed that Chinese stocks had risen by nearly $1 trillion during the span of a few short weeks, shocking even the most sanguine of financiers.
Along with the foreign investments, Chinese companies are fueled by ordinary investors who have had few to none options to build up their savings except for property and stocks. There are more than 160 million trading accounts in China, and the majority are held by retail investors who make less than $700 a month, according to a state media survey.
“It’s just like gambling,” said Wu Hao, a small-time investor from Beijing who rode another remarkable rally in Chinese stocks, in 2015.
Wu’s investment more than tripled.
“Brave people can make money,” he said.
But when the market crashed, he lost $2,800. (Source: Indian Express)
Wu and foreigners with billions of dollars alike are watching the same elements of delirium in the market and wondering
Some investors have indeed reversed their course, acknowledging the realities of investing in a country whose government has the power to inflate and deflate stocks at their proposed will. The market has been punctuated by huge swells one day, as state media talk up a bull run, and sudden plunges the next, as officials warn of irrational exuberance.
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