From Sober Look:
China's retail investors have lost all confidence in the nation's stock market. In spite of improving economic fundamentals (see discussion), the market continues to plunge. Unlike many other emerging markets, China's domestic stock market trading is dominated by retail investors. And many feel they have been duped, as the market hits new lows.
JPMorgan: - Of the households with stock market investments, 77% had not made a profit. The stock market has been the worst performing asset class over the last five years from various investment instruments available to the retail investor. If a retail investor put Rmb100 into the CSI300 five years ago and left it, it would only be worth roughly Rmb 47 today...
China's brokers have spent the last few years hyping the market, with positive projections each new year. And each year, retail investors have been disappointed. Now some are waiting for the government to effectively "bail out" the equity market before they would feel comfortable getting in.
WSJ: - "Local retail investors have lost faith on the stock market over the past three years. How can we expect investors to rush into a market where all expectations for a bottom, say the 3,000 and the 2,000 level, have proven to be wrong?" said Amy Lin, analyst at Capital Securities.
"The market is likely to stay weak until the government launches significant market-friendly measures, such as more stock buybacks of listed companies and another cut in banks' reserve requirement ratio," she said.
Many of China's retail investors simply left the stock market altogether, preferring property and gold instead...
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