CNBC’s The China Connection newsletter: From gamblers to investors?

Hi, this Evlin, he writes to you from the Hungdiene County, Zhejiang Province.

Local population is getting more enthusiastic about the stock market again. There is a lot of discussion about what pays the gains, but there are signs of a deeper change in what is considered a more speculative market.

Enjoy!

This report from CNBC newsletter in CNBC for this week, which brings you visions and analyzes about what leads the second largest economy in the world. Like what you see? You can subscribe here.

The change does not happen overnight, at least in the Chinese stock market that was Compared to the casino Because of its wild fluctuations.

It is, after all, slightly over 30 years old – one of the events compared to Western Port like the New York Stock Exchange, which was founded in 1792, and the London Stock Exchange, which was founded in 1801.

But China’s retail investors are successful, thanks to this in part to difficult lessons and increased information online.

“I think the real market is the best teacher. Real losses. “

He said about a decade ago, the local population sought annual returns from 30 % to 50 %, and rejected gains from two numbers. In contrast, the S& P500 and Dow Jones Industrial have achieved average annual returns less than 15 % over the past decade.

But Chinese investors on the mainland have been matured since then. The explosion of the Chinese stock bubble for the year 2015, the real estate sector crisis for the year 2020 and scandals in financial products such as Equipment is counterpart Who promised double digital returns-eliminated many portfolios.

Jane said that investors in China are less likely to chase the stories of one inventory, while keeping stocks longer and aimed at fixed returns from 5 % to 10 %. However, Jin noted that the companies listed in China still have a long way to determine the priorities of the shareholders ’returns through incentives such as profits or shares re -purchases, unlike the West.

The Shanghai Index reached a compound of 10 years old for 10 years, while CSI300, which tracks the largest and most liquid shares listed in Channel and Shanghai, at the highest level of three years. Part of the increase is attributed to the retailers who start in Customize some of their savingsAmid a clear reduction in trade tensions, the United States and hopes for economic recovery.

Unlike major markets such as the New York Stock Exchange, retail investors represent about 20 % to 25 % of trade sizes, China’s retail investors lead 90 % of daily trading, according to the data provided by HSBC.

However, the batch to rebalance the market away from the dominance of retailers and encouraging the growth of institutional investors in the long run, such as pension funds, insurance funds and other long -term institutional investors, helped reduce fluctuations, said Aaron Costilo, the president of Asia in Cambridge.

He said that the stock market on the mainland, known as stocks, has historically witnessed price fluctuations by 30 %, noting that it is closer to 20 %. But this is still higher than 15 % in the United States and Europe.

An annual study conducted by the Shanghai Financing Institute and Charles Shawab found that financial literacy among Chinese families Improved 2024. Women recorded higher than men in financial planning for the first time, as the report showed.

Investors in China simply exceed the search for high returns. They are more interested in the basic logic in addition to a busy record of the fund and its manager, according to the Chinese Financial Services Company, Noah, which manages the assets of high value customers.

Five years ago, Lindsay Zou, former colleague JP Morgan, started to launch videos on financing and total economy On YouTube The equivalent of the Chinese, Pebili. It now has more than 2.5 million subscribers on YouTube, more than 6 million subscribers in Bilibili – and more than 10 million on Douyin.

It became so popular that it was agreed by fans this summer after amending a committee in Beijing in the annual China Amc event to promote index funds. Another spokesman was also a financing influencer with 36,000 followers on Dwin.

There is a “Red Rocket” application, which is a “small” application available in the Chinese correspondence application and the famous social media, which is what He got 10 million users Since the launch of last year. The application, which allows users to analyze indexes and stocks, was developed by the China Amc Funds Management Company.

“Access to financial information increases stock investments, enhances the diversification of the portfolio, and improves modified returns by risks, even among the older users, less education and less rich,” according to A study published Monday By a team led by Bernard Young, a financial professor at the College of National Business Administration at the University of Singapore.

Their research, which uses data from an anonymous Chinese investment platform with 711 million active users, has placed a causal link between exposure to digital financial knowledge and improving investment behavior. It was also found that his visual content is “a much greater effect” on users of other formats.

“The emergence of professional platforms liquidated market noise,” said Wang Wei, a researcher at Tianjin Trading University, in Mandarin, translated by CNBC. But he warned that speculation is still on the market, even if it is now more focused on small themes such as electric cars or chips.

It has been discussed whether Beijing’s history was to interfere in the markets to ensure stability-especially in times of turmoil-has distorted stock prices from its basics and long-term returns, while affecting investor morale.

Wang pointed out that the stock market race preceded two major events, where Wang indicated: The Songhai Cooperation Organization Summit in Tianjin from August 31 to September 1, and the Chinese military parade in Beijing on September 3.

The stocks witnessed a A similar increase in October last year – After a rare government meeting, he referred to the stimulus plans – and before the week of October, the seventy -fifth anniversary of the People’s Republic of China.

Hong Kong Hang Singh Fahras It was flat, while CSI 300 on the main land added 0.72 %. CSI 300 has recently increased, as some economists and banks such as Nomura indicate “irrational abundance”.

The Chinese mainland index has increased more than 13 % so far this year.