Chinese retail investors have driven Shanghai stocks vertical in the past 6 weeks. The Shanghai composite is up 17% this month alone, 35% this year and more than 100% over the past 12 months.
But if the number of new accounts being opened is any guide, retail investors — gripped with the mania of chasing the market higher — still think that stock prices can rally further.
After the China Securities Depository and Clearing Co Ltd (CSDC) cancelled the “‘one person, one account’ restriction for normal investors” which permitted them “according to their need – to open multiple A-share accounts on the Shanghai and Shenzhen bourses,” 3.26 million new accounts were opened by Chinese investors in the past week, according to John Kicklighter Chief Strategist for DailyFX.com.
Kicklighter said on Twitter this “gives new meaning to ‘chasing the dragon'”.