Chinese stocks are ripping higher – again.
Having surged 2.7% yesterday the Shanghai Composite is up a further 2% today, taking gains since late October last year to over 85%.
What’s remarkable about the continued rally is that there appears to be no shortage of investors willing to join in.
As the above chart from Reuters shows, just last week the total number of new A-share accounts opened in China swelled by 1.68 million.
Yes, that’s not a misprint. 1,680,000 new accounts – nearly the entire population of Perth in just one week!
According to Reuters, over 6 million accounts have been opened in the last month alone. Going back further, from November 2014 when the PBoC first cut interest rates, the total number of accounts have grown by 12.4 million.
Excessive? Perhaps. But this is no ordinary bull market. It’s clear the Government are actively encouraging investors to participate, spruiking the virtues of investing in stocks since mid-2014.
While nothing like we’ve seen over the past six months can be sustained forever, for the moment at least, the people are listening.