However, it is important to keep China’s slowdown in perspective.
Behind the recent downswing in Chinese stocks and the subsequent steps being taken by the Chinese government to arrest the fall, could lie underpinnings of greater economic perils which threaten to slow-down the growth rate of Chinese economy. Twitter closed up 94 cents, or 2.6 percent, to $36.72. Hong Kong’s Hang Seng China Enterprises Index added 0.9 percent, while the Hang Seng Index advanced 1 percent.
Share values bounced back last week from a market rout that had seen the Shanghai index sink by more than 30 percent from a peak in June. The question is “whether the onshore stock market has bottomed”.
This question isn’t so simple.
The Chinese stocks have come under increased focus recently, owing to their recent slide and the subsequent intervention by the Chinese government. Earlier Friday, Samsung Electronics Co. shareholders voted to approve an $8 billion takeover proposal of construction-and-trading firm Samsung C&T Corp.by Samsung’s de facto holding company, Cheil Industries Inc. So in the long run, they may look to safer, more sustainable investments, rather than gambling in the stock market of high returns and high losses.
The Chinese market is divided into “A-shares” which only domestic Chinese investors can buy in order to protect local companies from outside influences, while H-shares can be bought through the Hong Kong market.
Chinese entertainment stocks – the main titles are listed in New York, Hong Kong, Shanghai and Shenzhen – have had varying fortunes since the stock market collapse. The yield on the 10-year Treasury note was 2.40 percent. Analysts said an agreement between the West and Iran on the country s nuclear programme – which will likely see a flood of crude on to global markets as sanctions are lifted – had largely been factored in by now. Many smart investors however, will have made money. In such circumstances, the sudden surge in the Shanghai Composite Index would have been viewed with suspicion by more experienced investors who will have taken their gains and cashed out at the expense of the new investors. By June, around eleven per cent of China’s four hundred and forty-three million households held stocks, representing the assets of tens of millions of members of China’s new middle class.
Wanda Cinema Line stock has struggled since the crash, and ended trade yesterday down 9.93 percent.
The area of land purchased for real estate development in the second quarter – a key indicator of future construction and steel demand – fell by 33.8 per cent from the same quarter past year.
Time will tell if the ructions in the Chinese share market will have any effect on sales of New Zealand consumer goods in China.
It can be a lot.
A pedestrian walks past an electronic board showing the stock market indices of various Asian countries including Japan’s Nikkei Average (top right) outside a brokerage in Tokyo.
In Nanliu village in northwest China’s Shaanxi Province, around 20 percent of villagers have invested their savings in stocks since 2006. Virtually all these retirement funds own some Chinese stocks for their growth potential, even those built for people hoping to retire soon.
The trend is heading that way.