Source: Wall Street Journal
Author: Weilun Soon
The Chinese stock market returns to the bear market.
Earlier this year, a wave of markets in the Chinese stock market appeared, and investors bet on the government's economic rebound after the government canceled the rigorous crown disease dynamic dynamic dynamic dynamic zero policy.This policy has been closed and controlled in major cities, dragging down economic activities.But this wave has not continued.
The Chinese stock market is now falling, which is affected by the increasingly pessimistic emotions of the country's economic recovery.The economic situation reflected by the official data is at best, and the retail sales, factory production and fixed asset investment have recently weakened the expectations of economists.
Eric Khaw, an Asian Stock Fund Manager Eric Khaw, said: "I think many investors actually mistakenly underestimate the scar effect of the crown disease." He said: At present, panic seems to dominate market emotions"
MSCI Mingsheng China Index has fallen into a bear market earlier, and has fallen by more than one -fifth compared to January.This index is a extensive indicator of Chinese stocks.The stock indexes in Hong Kong and mainland China also fell.Last Wednesday, the Hong Kong Hang Seng Index fell 1.9%, a total of 7.8%this year.China's CSI 300 Index closed down by 1%, and this year a total of 1.9%.The index is composed of companies listed in Shanghai or Shenzhen.
The Chinese government took measures to boost the downturn's real estate industry in November last year, and suddenly abandoned the dynamic zero -epidemic prevention policy in the next month.The rise of the stock market continued until the end of January, prompting more than $ 2 billion in capitals to flow into the US fund purchasing Chinese stocks.
China's Internet giants Alibaba, Tencent, and JD.com are the beneficiaries of the market rebound after the end of the dynamic clearance policy.After the Chinese government hinted in January this year, after the rectification of the Internet platform for many years, these companies' concerns in policies have decreased.
But the executives of these companies have expressed doubt about the speed of recovery.Alibaba CEO Zhang Yong said in May this year that consumer confidence and consumption power still need to obtain kinetic energy.Xu Ran, chief financial officer of JD.com, recently said that Chinese consumers may still be cautious, especially in large -scale commodity expenditures.The company plans to provide a $ 1.4 billion discount on the upcoming shopping festival to promote sales.Alibaba's stock price fell by 9.7%this year.JD.com's listing in Hong Kong has fallen 43%, and it has closed at the lowest level since the company's second listing in 2020 last Wednesday.The company had previously been listed in the United States.
Some investors are also worried about the political situation at home and abroad.In February, Sino -US relations deteriorated further. At that time, the United States shot down a Chinese reconnaissance balloon they said.Citi Analysts wrote in a report on May 30 that China's attention to national security will make the Chinese government's policy less friendly.
Janus Henderson Investments, Sat Duhra, said that although the Chinese government seems to have ended the rectification of the technology industry, investors are still worried that the government may take action against other companies.
Duhra said, "They have issued one regulations after a warning to the market. If you are a commercial investor, when you see such things, you will lose confidence."
In addition, the stocks of Chinese state -owned enterprises have also performed poorly recently.As investors' bet on government policies will benefit Chinese state -owned enterprises, and the Hang Seng China State -owned Enterprise Index, which tracks the performance of Chinese state -owned enterprises listed in Hong Kong, reached a peak in early May.But from then on Wednesday, the index had fallen by 10%.
Some investors have found a way to bet on the Chinese economy without entering the Chinese stock market and switched to luxury manufacturers and other companies for Chinese consumers.The Chinese government has set a 5%economic growth goal for this year.From the perspective of Chinese standards, this is a conservative number, but it is much higher than the expected growth rate of most other large economies.
