‘It Is All About Faith’: Eager Small Investors Buoy China Stocks in Market Maelstrom

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“I had quite a few sleepless nights after the Chinese New Year, wondering if I was wrong...But it turned out I was right to hold on.”

The enthusiasm, fueled partly by borrowed money, helps explain why Chinese stocks have weathered the global turmoil better than others. Compared with financial markets elsewhere, those on the mainland are more dominated by small investors, comparatively isolated from the global system, and subject to high levels of government influence.

As of the close on March 23, the Shanghai Composite is down 12.8% this year. Stocks in China’s second financial center, Shenzhen, which is more skewed toward high-tech companies without state backing, have done even better. Jennifer Li, a 32-year-old credit analyst at a commercial bank in Shanghai, said she had bought more brokerage and infrastructure stocks on March 13, after declines earlier in the week. She said she believes A-Shares, as onshore stocks are known, will rebound in coming weeks.

Favored bets include semiconductors, telecommunications equipment, software, health care and life sciences, with those sectors rising 7.4% to 11.6% this year, according to financial-data provider Wind. Standouts include China Wafer Level CSP Co., a semiconductor-equipment company that has surged about 116% in the year to date.

— Luo Weidong, Shenzhen Saiya Capital Management In the space of a week, one money manager, E Fund, cut short fundraising processes for three newly issued products tracking stocks and bonds, due to strong demand. The true figure could be higher, brokerage officials say, because strict caps on official margin lending, allowing investors to borrow no more than twice their cash deposit, have encouraged shadow lenders to emerge that instead offer leverage of four or five times.

 

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The worst is yet to come. Take a look at the world meter - no way that's good for business.

You are quite a China fan even China doesn’t let you in 🙄🙄🙄

😂😂😂

When the Wall Street Journal was sold it lost it's edge. Malcolm Forbes died and his magazine lost it's edge too. Time seems like a casualty of the digital age. I still like USA Today because it doesn't pretend to be anything other than a colorful National Newspaper in Hotels.

Pigs are ready for another slaughter.

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