Gov't support measures expected to spur recovery
There are high hopes for an improvement in China's slumping A-share stock market this week, investors told the Global Times Sunday.
Several retail investors the Global Times talked to on Sunday said they believed the recent government support measures would help to stabilize the turbulent market.
Chinese investors have suffered significant losses recently. According to a survey released by finance.sina.com on July 3, nearly one out of four respondents had suffered a loss of more than 50 percent in 2015.
In the last two weeks, the two markets in Shanghai and Shenzhen have slumped more than 4,000 points. And ChiNext, the country's NASDAQ-style board for high-tech and emerging start-ups, has fallen by more than 700 points in the same period.
The decline came after months of surging performance by the domestic stock markets. From May 30, 2014 to May 29, 2015, the Shanghai Composite Index more than doubled, and the Shenzhen Component Index rose nearly as strongly.
This bull run brought great profits for a lot of investors before the recent drop. Wang Zhaoxiang, a stock investor from Yangzhou, a city in East China's Jiangsu Province, told the Global Times on Sunday that since February he has invested about 1.5 million yuan ($241,800) in the market, of which one-third was borrowed via margin finance. Wang had made a profit of more than 800,000 yuan by the end of May.
But Wang said all his profits had "evaporated" over the past two weeks.
According to finance.sina.com survey, out of 38,829 respondents, 23.8 percent said they had suffered a loss of more than 50 percent on the stock market in 2015 and 27.7 percent had made a loss of less than 50 percent.
Dai Chenqiu, a 24-year-old Shanghai-based investor who started investing in mainland stock markets at the beginning of April, told the Global Times on Sunday that he had suffered a loss of 40,000 yuan by the end of June, representing almost 50 percent of his investment. "I am very anxious these days," he said.
A 58-year-old Shanghai-based investor, who wished to remain anonymous, also told the Global Times on Sunday that she had lost about 5 million yuan in the past two weeks.
"I have been an investor since 2000, and I have never experienced such great losses in such a short period of time," she said.
The central government has taken a series of measures recently to stop the markets from declining further, including lowering transaction fees for stock buyers and sellers, and relaxing rules for margin trading.
The 58-year-old investor nevertheless said that the biggest reason for the recent stock plunge has been the launch of too many new IPOs.
On Saturday, 28 enterprises announced they were temporarily suspending their IPO plans, according to a report Sunday by Nanfang Daily.
However, the recent bearish market will not halt the flow of new IPOs in the long term, Wang Yiqian, an analyst at research firm iResearch, said in a note sent to the Global Times on Saturday.
But the suspension of IPOs and the government's recent measures to stabilize domestic stock markets appear to have bolstered confidence among investors. "I believe the government wouldn't want the bearish trend to last any longer," the 58-year-old investor said.
Wang also said that he has confidence in the government policies.
"I bought some stocks on Thursday and Friday, just because I believe that on Monday the markets will rise in response to the government measures."
But Wang also admitted that he was playing a risky game. "I will suffer a huge loss if the stock market continues to fall," he said. Both Wang and Dai also said they would try to be more prudent in the future.
