Bullish on China Stocks

Shanghai Stock Exchange

South Korean individual investors net-bought 15.3 billion won of the Mirae Asset TIGER China ETF in the first week of this month. The ETF was their third-favorite ETF and most favorite foreign stock ETF in the South Korean stock market during that period. In addition, Samsung KODEX ChiNext ETF-Synth linked to the Shenzhen ChiNext Index and Mirae Asset TIGER China CSI300 Leverage-Synth posted a net buy of 7.4 billion won and 7.3 billion won to rank fifth and sixth, respectively.

Individual investors’ direct purchase of Chinese stocks is increasing as well. According to the Korea Securities Depository, the trading volume totaled 728.9 billion won for the first nine days of this month whereas the volume was 1,247.8 billion won in the entire previous month. On the top 50 net-buy list of individual investors investing in foreign stocks, the number of Chinese stocks increased from six to 14 this month.

This is because the Chinese stock market is rallying. The Shanghai Composite Index topped 3,400 in two and a half years and rose 15.61 percent from July 1 to 9. Likewise, the Shenzhen Composite Index and the Hong Kong H Index rose 14.64 percent and 10.48 percent, respectively.


Chinese individual investors are increasing their investment in their stock market, too. In May this year, 1,214,000 securities accounts were newly opened in China, up 5.34 percent from a year earlier. The total number was approximately 166 million as of the end of that month.

 

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