China’s big and bold stock market bull run

(REUTERS) – Meet Lu Tingbo, a physics major at Peking University who’s also an active investor – managing about about 800,000 dollars cobbled together from family, friends and schoolmates.

PHYSICS STUDENT, PEKING UNIVERSITY, LU TINGBO,

“In June of last year, I used 215,000 yuan to buy stocks. By the end of yesterday, my net assets were 1.3 million, that is a 650 percent increase.”

Lu is just one of millions of new retail investors placing their savings and borrowings into China’s burgeoning stock market.

REUTERS REPORTER, TARA JOSEPH,

“I’m at the Hong Kong stock exchange where many Chinese shares are jumping like they never have before. It’s not because the country’s economy is speeding up – in fact, it’s slowing down. It isn’t because company earnings are fantastic either.”

Instead, its because China is pushing to open up its capital markets – aiming to change from a manufacturing-led economy to a consumer-driven powerhouse.

That’s led to eye-popping 145 percent gains on Shanghai’s stock market in the past year alone.

Some are worried that the market is a bubble waiting to pop.

But economist Paul Schulte thinks this may be the gift that keeps on giving.

CEO & CHAIRMAN, SCHULTE RESEARCH PAUL SCHULTE,

“In Japan in the 1970s and 80s we had a very massive bull run. In ASEAN in the 1990s, we had tremendous bull runs. These are part of structural change that is very exciting; political reform, industrial reform, financial reform, currency reform, interest rate reform are all happening at the same time.”

Back at Peking University, Lu is less worried about the stock market failing and more concerned about finding more time away from his studies to watch the markets.

He’s part of a new generation in China that sees investing as the key to building a safe and more trend-friendly future.

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