of Stock Households Earned Money from Bull Market
13:52 on Apr. 24,
2015 Author: Gan Li (37)
Column for Sina Finance (WeChat account: kopleader) columnist Gan Li[Microblog]
According to the
data, the overall earnings ratio of stock households in 2013 was only 15.8%;
while the ratio in 2015Q1 reached 76.6%: 78.4% of old investors and 72.5% of
new investors earned money.
The rising rate of
Shanghai Stock Exchange (SSE) composite index in 2015Q1 was up to 13.7%. The
index was at 4,000 points on Apr. 10. The turnover of the stock markets of SSE
and Shenzhen Stock Exchange (SZSE) on Apr. 20 reached 1.8 trillion, becoming
the highest value of world exchange. Via the telephone interview with
households in 2015Q1, China Household Finance Survey (CHFS) timely understood
and predicted the recent changes of the stock market.
As of 2015Q1, the
stock market participation rate of Chinese households reached 6.1%, and 30.7%
of them opened account in the second half of 2013. New investors were younger;
12.6% of them were younger than 30 years old; post-80s and post-90s were fresh
blood in the stock market, while only 1.8% of old investors were under 30 years
old. The popularity of the stock market has spread to third- and fourth-tier
cities. 37.8% of new investors and 32.4% of old investors were in third- and
turnover was supported by the new funds. 30.6% of stock households increased
their investment fund in the stock market in 2015Q1. 4.8% of them said that
they increased a lot of stock fund. Only 8.9% of the households said they
decreased investment fund in the stock market.
The rising stock
market was really reflected in the earnings and loss of stock households. The
overall earnings ratio of stock households in 2013 was only 15.8%; while the
ratio in 2015Q1 reached 76.6%: 78.4% of old investors and 72.5% of new
investors earned money. The earnings ratio of stock households owning more
stocks was relatively higher. The earnings ratio of stock households owning 4
stocks was 84.8%, which is much higher than that of stock households owning
less than 3 stocks, 74.4%. Do not invest all funds in one stock, even in bull
Chinese culture is
featured with the tradition of “spreading only the good news but not the bad”.
We have heard more about stories about earning money in the stock market.
According to the data, more households were talking about stocks; the frequency
for talking about stocks in Mar. was higher than that in Feb. for 12.7% of the
households investing in stocks. 33.9% of the households held that they talked
about stocks slightly more frequently; only 6.4% of the households talked about
stocks less frequently.
The expectations of
the investors and the common people (71.810, -0.61, -0.84%) were an important
factor for the subsequent trend of the stock market. Even though the government
and economists were extremely worried about the current macroeconomic
situation, the interviewees were generally optimistic. The macroeconomic
expectations index was 120.18, while that of stock households was 124.0, which
was more optimistic. In terms of stock market expectations, the index of the
common people was 113.3; and that of stock households reached 133.9. The
following households were more optimistic about the expectations: old
investors, households with a householder having university education
background, households with multiple homes, and those earned money in the stock
market in 2015Q1.
As for investment
orientation, new investors were more apt to invest in SME stocks and Growth
Enterprises Market (GEM); while households with earnings were more apt to
invest in main board stock. In terms of stock plan, only 22.1% of the investors
had stock increase plan. Old investors, households with a householder having
university education background and those earned money in the stock market in
2015Q1 were slightly optimistic about stock increase plan. It seemed that even
though the investors had strong stock market expectations, they were quite
cautious in stock increase.
constructed an investor sentiment index with its sampling survey data and in
combination with the data on the number of newly opened stock accounts and
turnover rate in the stock markets of SSE and SZSE. The investor sentiment
index in 2015Q1 was 121.0, showing that the investors were in high spirits.
According to the
data above, I hold that the stock market will keep rising in the near future.