CSI: Chinese Securities Investigation
Oops, make that "China Securities Index", a composite of the 300 largest, most liquid A-shares available, up 4.37% last month. Unlike Stateside, where new retail investor growth is curtailed by overindulgence in avocado toast and college loan repayments, May saw almost 1.5m new Chinese individuals open stock trading accounts.
Bubble forming? What - like China's real estate bubble? That's no soap bubble - that's cement glue. On a rare less flippant note, 9% of total trading last month was margin, indicating significant bearishness.
"We're going to be seeing a lot more inflow out of B shares and into A shares," says Edward Lehman. "But what I find most salient are the stocks enjoying the most volume. We're not talking about AI or chip companies, but steel makers and pig farms. Also vaccine makers, a no-brainer, as are brokerage companies, and interestingly, some green energy companies. Although largely non-institutional, China's stock players seem to be picking more inflation-resistant securities."