Mutual feelings over bullish stock market
Updated: 2007-01-19 15:06
Only someone living in a cave could have missed the fact that China's stock market staged a mighty comeback in 2006, turning itself from one of the world's worst performers in 2005 into one of its best.
It is a rare boon to individual investors, many of whom lost not only their fortune but also their confidence in the stock market during the previous five-year slump.
The majority of individual investors gained in 2006's bull market. About 70 percent made profits, according to a survey conducted by China Securities Journal, a leading securities newspaper. About 30 percent of those polled say the yields on their stock investment ranged from 20 to 50 percent, while 16 percent say they suffered losses. Around 5 percent saw their investment double, the survey shows.
Good though those returns may be, many of the individual investors may still find themselves outperformed by their fund investor counterparts, many of them first-time investors. Thanks to the soaring stock market, the value of many mutual funds skyrocketed.
The eye-popping investment returns have made "fund purchase" a buzzword in China, attracting a growing number of investors. Even many veteran stock market investors have become mutual fund buyers.
New mutual fund accounts amounted to 6.73 million by the end of November, while only 4.3 million new yuan-denominated A-share stock accounts were opened at the same time, according to figures from China Securities Depository and Clearing Corporation Ltd.
Some 270,000 new fund accounts were opened in three days December 1, 4 and 5 three times the number of new yuan-denominated A-share stock accounts opened at the same time. The massive inflow of individuals investing in mutual funds, experts say, is an encouraging sign that the Chinese securities market is becoming more mature.
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