Main reference: Story in Chinese Securities Journal
MORE THAN SEVEN out of 10 Chinese shareholders are bullish on market prospects this year, especially following the three-day market break to begin 2013.
So what’s informing their optimism?
Things ended very well indeed in an otherwise horrific 2012 for the PRC’s A-share markets in Shanghai and Shenzhen.
China’s stock markets were closed from Jan 1-3 to mark the New Year and reopened on Friday, but not before racking up a 5.1% surge in the final five trading days of the year 2012.
The market made up a lot of lost ground in December, adding nearly 15% in the month alone.
With the upbeat sendoff for 2012, it’s no wonder that over 70% expect this year to start off even better for China’s capital markets.
And a nearly equal number of investors – around 60% to be more precise – are planning to boost their shareholdings in the days following the Jan 1-3 break as well as in and around the upcoming Mother of all Chinese holidays... the Lunar New Year Festival which kicks off on February 10.
Some 73.4% of respondents in the latest sentiment poll said they expect a big bounce this year, with bullish bourse behavior anticipated in the coming days as well as around the traditional PRC holiday when hundreds of millions of Chinese take to the rails, roads and airways to visit their hometowns for an extended break.
Another 42% of investors surveyed said they were already in a holiday spirit, having jacked up their shareholdings to over half of their investible capital already.
Finally, around 60% of shareholders said they are planning to increase their holdings amid the expected gradual A-share upswing.
Looking back at recent history over the past 22 years, the benchmark Shanghai Composite Index has risen on the first day of trading in the new calendar year on 14 occasions and fallen on the other eight days.
Perhaps most telling is the fact that since 1990, the benchmark index has seen 16 Decembers finish up, or 73% of the time – exactly the number of polled investors who think this year will get off to a bullish start.
Due to the gradually improving domestic economy, better industrial data of late and slightly better prospects overseas, the general sentiment is trending toward the bullish – especially after the stellar December market performance in China.
“The new calendar year is likely to kick things off with an uptrend, and January should enjoy an improving moving average with more upside visibility expected for the first quarter,” said Liu Yunfeng of Datong Securities.
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