The wealth of middle-class families in China has shrunk substantially as a result of the recent stock market crash, said a report published by the China Securities Depository and Clearing Co Ltd.
The number of accounts with stock holdings worth more than 1 million yuan ($156,200) fell by 550,000 in June and July during the market rout which slashed the benchmark stock index by nearly 30 percent during the period.
The situation was even worse for smaller investors as nearly 870,000 accounts with stock holdings worth between 100,000 yuan and 500,000 yuan disappeared during the period, the report said.
The market crash also hit investor sentiment as the growth in new account openings dropped significantly.
The market saw 2.04 million new accounts opened in July, down 55.89 percent from the previous month.
The opening of margin trading and short selling accounts also shrank in July. Only 54,836 such accounts were opened by retail investors. Prior to the market crash, the average monthly number of new accounts was 278,400 since the beginning of last year.
The market deleveraging also led to the shrinking of the outstanding value of margin lending and securities financing, which dropped to 1.34 trillion yuan in July from the peak of 2.04 trillion yuan.
"Cases of wealth being wiped out by the market plunge have been everywhere. The main reason is the substantial loss of stock values," said the manager of a private equity fund on condition of anonymity.
