Knowing the China Stock Market – Shanghai Composite Index

Looking historically at the Shanghai Composite Index since the time when the Global Financial Crisis struck in 2007-2009, the index was once very high at 5,272.00 points by the end of 2007. It came down sharply to 2,093.00 points on 2 March 2009. In the last 4 years (2014 – 2017), the index was above 3,000 points. However, it vacillated between 3,000 points to 3,500 points (after a brief spite in June 2015). See chart and graph below.

Shanghai Composite
   
Date Index
31 Dec 2007  5,272.00
2 Mar 2009  2,093.00
   
31 Dec 2012  2,269.13
31 Dec 2013  2,115.98
31 Dec 2014  3,234.68
31 Dec 2015  3,546.13
30 Dec 2016  3,103.64
29 Dec 2017  3,307.17
   
30 Mar 2018  3,160.53
8 May 2018  3,161.50

 

Now the index was 3,160 points in recent months. If one were to believe that the world’s second largest economy is to continue to grow with the Belt & Road Initiative in the years to come, then it warrants investors to consider the possibilities of uplift in its stock market in the longer term. This is on the condition that the global economies do not face trade protectionist scenario and China is willing to free up her economy to market competitions. China’s shadow banking credit risk is also one area to watch carefully.

One caveat though is that China stock market can also defy rational thinking as the past is any indication. A single country investment can be risky. Maybe a calculated risk in investing in China economy is worth taking?

Copyright © 2018, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

 

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One Response to Knowing the China Stock Market – Shanghai Composite Index

  1. Sinkie says:

    If you’re talking about overall China index of stocks, the big rewards will go to those with holding power of 20 yrs.

    Else you need to analyse and select stocks. E.g. chinese internet & tech stocks gained almost 100% in just 2017 itself.

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