China's richest investors multiply as stocks rebound from lows

[SHANGHAI] China's wealthiest investors grew larger by number in March as stocks rebounded, while those with the least funds fell.

The number of traders with more than 10 million yuan (S$2.10 million) of shares in their accounts increased 20 per cent in March, while investors with less than 100,000 yuan dropped 3.9 per cent, according to the nation's clearing agency. The Shanghai Composite Index jumped 12 per cent last month, its biggest gain since April 2015, amid signs of stabilization in the economy and the currency.

While at least some of the increase can be explained by rising market values, JK Life Insurance's Wu Kan says evidence that the richest traders are returning would be positive for the world's worst-performing stock market. The Shanghai Composite Index is still down 15 per cent in 2016, lagging behind a 0.7 per cent gain by the MSCI All-Country World Index.

"Risk appetite in the broader market is picking up with the main market participants coming back," said Mr Wu, a fund manager at JK Life Insurance in Shanghai.

Some 535,000 new investors piled into the nation's equities in the week through March 25, the highest since mid-June - when the benchmark stock gauge peaked before a US$5 trillion rout. That's still only about a third of the record 1.6 million who opened accounts in the last week of May 2015. The latest figures show there were 292,600 new investors in the holiday-shortened week through April 8.

The number of the richest traders fell in both January and February, while those with the least funds rose in each month, according to the China Securities Depository and Clearing Corp. The Shanghai Composite plunged 24 per cent over the two-month period. The gauge dropped 1.4 per cent on Monday, paring its gain in April to 1 per cent.

The yuan climbed 1.6 per cent against the dollar in March, its biggest monthly gain since 2010, after sinking to a five-year low in January. The nation's foreign-exchange reserves increased last month along with factory activity.

BLOOMBERG