Investor confidence backstops rebound

The mainland A-share market has wavered in August following the previous month's surge. The benchmark Shanghai Composite Index hovered around 2,200 points last week, the high point of the recent rebound.

Despite the release of gloomy economic data for July, investors have held on to their optimism. Their confidence stems from signals of further economic reforms. Some analysts believe that the country's economy has entered an era of structural adjustment, as opposed to the focus on steady growth of the past. Specifically, reforms to the industrial and financial sectors have buoyed investor confidence. Furthermore, the approach of the Shanghai-Hong Kong Stock Connect program and a weakening real estate market have further funneled money into A shares.

A now-bullish market offers a place for regular people to put their money. Until recently, they had few choices other than to bet on real estate or low-return financial products.

A series of measures aiming to ease the cost of fund raising for enterprises also bolstered stock prices. Regulators also released several measures to hedge against the blow to share prices during IPOs, which should help attract more domestic and overseas funding.

Analysts believe that the indicators for short-term investment have hit bottom, and it will rebound at any time, leading to a further growth of the A-share market.