© Reuters. Investors look at an electronic board showing stock information at a brokerage house in Shanghai, China September 7, 2018. REUTERS/Aly Song
Scores of retail investors are dabbling in micro-cap stocks - stocks whose market capitalisation is tiny - operating under the radar of big funds and investors and their massive market-moving flows. Strategies such as Cui's stand out this year in a stock market depressed by China's wobbly economy, heightened geopolitical risks and surging overseas interest rates. The Wind Micro Market Cap Index, which tracks the 400 China-listed A-shares with market value typically less than 3 billion yuan each, is up 37% so far this year. In contrast, the blue-chip CSI300 Index has lost 8%.
Retail investors are a big force in China. CSRC Chairman Yi Huiman notes that their transactions accounted for about 60% of the total A-shares turnover in late 2022. An index tracking China's actively-managed equity funds has slumped 14% this year after sell-offs in once favoured sectors such as battery companies and spirit makers. In contrast, an index tracking ChatGPT concept stocks such as 360 Security Technology and TRS Information Technology has soared more than 40%.