China’s Stock Market Tops $10 Trillion for First Time Since 2015

In this article

Chinese domestic equities are worth more than $10 trillion for the first time since 2015, when a record crash erased half the market’s value in months and saddled millions of investors with losses.

The world’s second-largest stock market has added $3.3 trillion since a low in March, helped by Beijing’s policies to encourage equity trading, a flurry of new listings and the strengthening yuan. Stocks have been close to the $10 trillion milestone since July, when China’s government acted totame a speculative rally that had suddenly pushed a gauge of large caps near a 12-year high.

The country’s total market capitalization is now $10.04 trillion and just shy of the all-time high, according to data compiled by Bloomberg as of Oct. 12. The U.S. has the world’s most valuable stock market at $38.3 trillion.

Chinese shares have rallied since a long holiday break onoptimism the government will introduce reforms to turn the region around Shenzhen into a global technology hub and that the ruling Communist Party will introduce policies to stimulate demand when it holds a major meeting later this month. Equities surged over the summer as margin debt climbed at the fastest pace since 2015 and turnover soared.

A stronger yuan has also helped stocks. China’s currency rose 3.9% last quarter, the most in12 years. That advance has prompted the central bank torestrain the yuan’s rally while stopping short of encouraging declines.

China has added a new stock venue since 2015, with the Nasdaq-styleStar market launching in Shanghai in July last year. Regulators waived rules on valuations and debut-day price limits for shares on the board.

— With assistance by John Cheng, and Amanda Wang

Source: Read Full Article