Business
Warning Bells Ring as Small-Cap ETFs Fuel China’s Market Frenzy: A Deep Dive into the Sustainability of Recent Surges
Shares in China: Warning signs for optimistic investors in world's largest market surge from small-cap ETFs
A minimum of 15 ETFs associated with the ChiNext standard of small businesses on the Shenzhen exchange alerted investors within the initial trading hour today.
E Fund Management's ChiNext ETF demanded a 25% increase in value, whereas a comparable financial instrument from Guotai Asset Management experienced nearly a 30% rise above its foundational worth.
The surge of investments in small-cap ETFs provides a glimpse into the frenzied activity of China's 200 million individual investors and numerous institutional funds. They are scrambling to enter a market that has seen a value increase of 3 trillion yuan (US$424.8 billion) in a mere three weeks. However, the rapidity of these gains has sparked skepticism regarding the longevity and stability of this uptrend.
Highlighting the doubt, the Chinese stock market has been fluctuating wildly, with investors cashing in on substantial short-term profits and a disappointing briefing from the country's leading planning agency. The CSI 300 Index, monitoring the biggest stocks in Shanghai and Shenzhen, has oscillated between a decrease of 7.4 per cent today and an increase of 10.8 per cent from yesterday, after a 35 per cent surge over the past ten days.
Discover more from Automobilnews News - The first AI News Portal world wide
Subscribe to get the latest posts sent to your email.