After a four-year slump that halved the Shanghai index, it is up a whopping 60% so far this year, inspiring Chinese investors to once again return to mutual funds and stocks, Reuters reports.
Experts believe the investments will stabilize the nation’s economy, as investment returns will keep Chinese from taking out risky bank loans. Investors are also putting money to work in the markets after a steep run-up in real estate prices, and in so doing, the flows should reduce the real estate bubble that has recently threatened the economy.
In the five months through the end of September, two million additional Chinese placed money in the markets, bringing the total number of investors in the nation to 76 million, according to the
Part of the reason for the renewed interest in the markets was the successful initial public offering two weeks ago of the country’s largest bank,
Mutual funds jumped on the IPO, telling investors in advertisements that investing in ICBC and other blue-chip Chinese stocks is an excellent economic opportunity.
Nonetheless, few Chinese participate in the markets; the 76 million who are invested represent only 5% of the population.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
