The A-share market in China has recently experienced a robust recovery, fueled by stronger-than-expected stimulative policies, leading to increased investor confidence and engagement. Industry experts suggest that this upward momentum could be further solidified by additional supportive measures and ongoing economic optimization.
As preparations were made during the National Day holiday, the Shanghai Stock Exchange (SSE) announced an extension of trading hours by an additional five minutes, from 9:25 to 9:30 AM, effective Tuesday, the first trading day post-holiday. This adjustment aims to accommodate the surge in newly registered retail investors and enhance trading efficiency.
Leading brokerage firms reported a significant increase in account openings and investor inquiries during the holiday. Sinolink Securities noted a 150% rise in account opening appointments compared to the previous month, while Minsheng Securities saw requests for new stock accounts quadruple over the past week.
To accommodate this growing demand, the securities account platform and identification verification systems resumed operations during the holiday.
The recent rebound in the A-share market has bolstered investor confidence, with the Shanghai Composite Index rising 20% and the Shenzhen Component Index climbing 29% since the introduction of incremental policies on September 24. Notably, the combined trading value at both the Shanghai and Shenzhen exchanges reached a record high of 2.6 trillion yuan ($370 billion) on September 30.
Laura Wang, chief equity strategist at Morgan Stanley, indicated that Chinese equities could see an additional 10-15% gain if new fiscal measures are implemented in the coming weeks. This sentiment is echoed by analysts who expect the National Development and Reform Commission to unveil further supportive policies aimed at enhancing economic growth and optimizing the economic structure.
With household savings in China amounting to approximately 140 trillion yuan, analysts foresee an influx of capital into the A-share market following the holiday, potentially driving market indexes higher.
Experts from Shenwan Hongyuan Securities noted that the Hong Kong stock market has outpaced the A-share market recently, suggesting that continued rallies in the A-share market could help narrow the price gap with Hong Kong.
Dai Kang, managing director at GF Securities, highlighted that private equity investment funds are increasing their stakes in the A-share market, which has seen its strongest rebound in months. Goldman Sachs has also upgraded its outlook on Chinese stocks to “overweight,” citing recent stimulus measures that have improved market confidence.
While some analysts, such as those from Huafu Securities, caution that the A-share market may experience adjustments and fluctuations following its sharp rise, they remain optimistic about the overall upward trend continuing, bolstered by improving earnings and a recovery in domestic demand.