Published On: Sun, Jun 14th, 2015

Chinese Stock Markets Valued Above $10 Trillion

The Chinese Stock Market

Chinese stock markets have been the best performers in the world this year.

At the end of trading on Friday the Chinese stock market value rose above $10 trillion for the first time, the latest record following a year of tremendous gains.

The Chinese stock market has seen an increase of $6.7 trillion in the last 6 months; this has taken the SSE Composite Index from 2085 to 5166 a rise of 150% in the last 12 months. No other stock market in the world has seen such impressive gains in the last 12-month period.

The stimulation of the market comes from the opening of international investment into Chinese stock markets causing Chinese retail investors to delve into their local market on positive speculation. China saw 4.4 million people open new trading accounts in the last week of May. The impact of so many people trading has increased Shanghai stock exchange’s margin debt to a high of $232 billion.

There is however concerns as many sectors in China such as manufacturing, retail and exports have been slowing in growth seeing their worst progress since 1990 and certainly haven’t seen the same progress as their stock market counterparts.

The Shanghai trades at roughly 26 times reported earnings which last year traded at 9.6 times which was the lowest since 1998. The Shenzhen Composite Index now trades at 77 times profits following a gain of 194% in the last 12 months.

Foreigners can now purchase shares in the country through a link with Hong Kong although there are quotas in place limiting purchases.

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