New school of investors fuels rally
Print Edition
A recent rally in China’s stock markets has been driven by new investors whose education level is below high school and who own relatively little assets, a survey showed yesterday.
A total of 67.6 percent of the new investors did not study beyond high school, compared with 26.8 percent of existing investors, the Survey and Research Center for China Household Finance at Chengdu-based Southwestern University of Finance and Economics said.
The new investors who were educated up to junior school totaled 36.7 percent, making them the biggest component of the new investors.
The average household wealth for the new investors was about 1.6 million yuan (US$258,000), more than half the 2.9 million yuan for the existing investors.
The Shanghai Composite Index surged 52.9 percent last year to be the world’s top-performing major equity market.
“The new survey data add to the impression of a rally fueled by inexperienced retail investors.” Tom Orlik, chief Asia economist at Bloomberg News, said in a report yesterday.
“But that doesn’t mean it can’t be sustained,” Orlik added. “China has a large population with a substantial volume of savings and limited alternative investment options.”
The center surveyed over 3,000 households for their income and assets at the end of 2014. It identified new investors as those who opened share trading accounts in the fourth quarter of last year.
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