Stocks News
- Share declines shake confidence of novice Chinese investors
Date: 30-Nov-2007 Sources: (Xinhua Online)
BEIJING, Nov. 29 (Xinhua) -- Novice investors have had their confidence shaken by recent stock market declines in China, with more than 80 percent telling pollsters that they planned to pull out some or all of the money they put into funds near the market's peak just six weeks ago.
Up to 36 percent of 1,000 fund investors surveyed in Beijing, Shanghai, Guangzhou, Wuhan and Chongqing said they lost money when the market fell more than 20 percent from its record high in mid-October.
The benchmark Shanghai Composite Index dropped to 4,803.39 points on Wednesday from its record high of 6,124.04 points on Oct. 16. The survey was taken before Thursday's reversal, which saw the key Shanghai index gain 199.94 points to close at 5,003.33.
Taking Thursday's gain into account, the index has actually risen 87 percent so far this year.
The 36 percent had bought funds at or near market highs, before the correction, according to the survey conducted by the Social Survey Institute of China.
A total of 51 percent of those surveyed said they would liquidate all of their investments, while 36 percent said they would reduce their equity holdings. Only 13 percent said they planned to remain invested for the long term in anticipation of making a profit.
Many Chinese have recently shifted money into the stock market and out of bank accounts, where real interest rates are negative.
However, the survey found that many of these new investors apparently did not make their stock-purchase decisions on a rational basis. It shows that 57 percent of the interviewees were first-time investors and only 10 percent had more than two years' experience in portfolio investments.
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