Families' savings and small investors

The Chinese stock rally is expected to receive a group of small investors, which will revive the hope that their great savings will feed the next phase of the incredible rise in the market. The SCI 300 (CSI 300) index had a sharp increase as it climbed 10% in August to become one of the best performance indicators in the world driven by liquidity. While the hedge funds in the market were active, analysts say that young investors in the country are still in the early stage, which can cause a major shift to shares and stock closets. The deposits of Chinese families fell 0.7% from their highest level in June to 160.9 trillion yuan ($ 23 trillion) in July, suggesting that the Chinese invest their money. JP Morgan expects about $ 350 billion from additional savings to the stock market between July 2025 and end of next year, causing stock prices to rise by more than 20%. “Criticism contributes to the rise of the markets, and the transfer of deposits to stocks will be a great motivation for this height.” He added: “It has already started, and there is no room for refuge.” The abundance of savings is one of the factors that drive Wall Street to increase the targets of the most important stock indicators in China, and it is feeding the hope that the China rally will continue for a long time, which has so far challenged the poor profits and constant doubts about the health of the economy. The “Goldman Sachs” strategy referred to the surplus of families’ savings in raising their goal for the SCI 300, as the bank now expects an increase of about 10% in the next 12 months. ‘HSBC’ believes that the size of this saving can be a ‘very positive catalyst’ when the biggest goals in the country are increased. Darwin Mao, a 28 -year -old technical employee of Beijing, is considering investing in the stock market since last September. At that time, an economic motivation package of the Chinese central bank led to a sharp rise in share prices, which ended a wave of sale for years, which fed the fear with the economy. The Sci 300 index jumped by about 25% in a week, causing a feverish wave of purchasing among local investors. The index exceeded its highest level until August. “The share prices rose so quickly that time didn’t help me invest,” Mao said, adding that he didn’t want to miss the opportunity this time. “I seized the opportunity to invest some of my surplus money at the end of July, and I have increased my investments. I think this height will continue until the end of this year,” he said. The Sci 300 increased in nine of the past ten weeks, increasing its profits to 25% of its lowest level this year, recorded in early April. Investors have expressed their confidence that authorities will maintain moral support before the military parade, which will be held on the occasion of the eighties of the end of World War II. Historically, China supports its stock market for important political events to emphasize stability. Some strategists, including experts in “Morgan Stanley”, point to signs of a sharp rise in the market, as some technical indicators show signs of saturation. For example, the shares of “Cambrone Technologies” doubled in August, which asked the artificial intelligence design business to warn investors that the share price may not reflect the basic factors, which led to a decline in the share price Friday. A supporting environment for shifting to shares so far is still limiting the shift from savings to stocks. In July, not financial deposits – that is, the money converted into accounts associated with stocks, funds and trust accounts – increased by 2.1 trillion yuan, and although it is the biggest increase since February, but it is not exceptional, as it is slightly more than the seasonal average in the last decade. But analysts believe that the shift to shares is gaining its momentum from an environment that does not offer ‘alternatives to the stock market’. The benefits of effects are close to their lowest historical levels, while real estate – previously the preferred investment of Chinese citizens who were looking for wealth – has not yet recovered from its constant stagnation. And fixed deposits for one year in the largest Chinese banks currently pay only 0.95% annually, which is the lowest level. “There is a shortage of assets that can be invested in China. If the stock market has a clear influence on the return on investment, people will be ready to assign more money,” says Wu Wu, China’s main strategy at Bank of America Cistiortes. Beware of the important question bubble is the extent of the Chinese officials’ ability to manage market fluctuations. The regulatory authorities and local investors are still negatively affected by previous periods of fluctuation in the market between wealth and contraction, the most prominent of which was a bubble that occurred a decade ago, which led when it exploded to eradicate more than one trillion from the market value. The local mediation business, “Cennolk Cisitities”, has raised “stock traders margin requirements, while some local investment funds have limited the number of new requests. It is not clear whether these movements are driven by organizational guidelines as it is regular that Chinese officials are not issuing the secret instructions for brokers and investment funds. fluctuations, which will encourage them to stay this time.