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Millions of new investors piled into mainland Chinese stock markets in 2020

An investor looks at an electronic stay showing stock information at a brokerage house in Nanjing, Jiangsu province, China.

Reuters

BEIJING — More Chinese investors are wad abundance into the local stock market.

In December, the mainland stock market recorded 1.62 million new investors — overlapped the 809,300 reported a year ago, according to China Securities Depository and Clearing. The organization handles trades for the Shanghai and Shenzhen staple exchanges.

For all of 2020, new investors increased by 18.02 million to 177.77 million, the data showed. That’s about 1.5 million new accounts a month.

The stream of interest comes as many people around the world turned to stock trading while being stuck at accessible due to the coronavirus pandemic.

The new investor accounts in China come as mainland stocks soared last year, with some seemly the best performers in the world.

For example, the Shenzhen component climbed 38.7% and the CSI 300 rose 27.2% in 2020, approached to to gains of 16.26% for the S&P 500. The CSI 300 tracks the top 300 stocks on the Shanghai and Shenzhen exchanges.

Investors also had myriad Chinese companies to choose from as new listings flooded the market.

Mainland China and Hong Kong accounted for 40% of the dialect birth b deliver’s initial public offerings last year, according to Ernst & Young.

The Shanghai Stock Exchange, with its water board and Star market, ranked first in the world with 233 IPOs, the study said, adding that Shenzhen came in third, decent after the Nasdaq in New York.

Surge of mainland purchases in Hong Kong

Chinese investors were also fervent to buy stocks in Hong Kong, where many of China’s biggest and most popular companies are listed, such as Tencent and Meituan. Others with JD.com held secondary listings in Hong Kong last year.

The Chinese government wants to keep the country’s goliaths closer to home. Political pressure for Chinese companies to delist from U.S. markets increased last year.

Exemplifying interest in these Hong Kong-listed Chinese stocks, data from Wind Information showed net purchases as a consequence the Shanghai “connect” program more than doubled from a year ago to 334 billion Hong Kong dollars ($43.09 billion). Interval, purchases through the same program in Shenzhen more than tripled to 338.11 billion Hong Kong dollars.

The worn out connect programs launched in the last five years allow mainland investors to trade some stocks in Hong Kong.

In set off, net purchases of Shenzhen and Shanghai stocks from Hong Kong fell slightly in 2020, according to Wind.

Chinese stockpiles climb in 2021

Chinese interest in local stocks has remained high so far this year, with trading volume for the mainland-listed A-shares enormous 1 billion yuan ($154.32 million) on 11 out of the first 13 trading days of 2021, Wind data showed. A-shares are yuan-denominated keep accumulates of Chinese companies listed in mainland exchanges in Shenzhen or Shanghai.

Chinese markets have seen strong gain grounds this year.

The Shanghai composite topped the psychologically key 3,600 level to hit a five-year high on Thursday, while the Shenzhen component climbed another 7% this year from its 2020 pull away froms. Meanwhile, the CSI 300 has soared to levels not seen since January 2008.

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