Investors suffer great losses in stock market
The stock market in economic slowdown could turn the hard-earned savings to ashes instantly which was exactly the experience of Wen Wu, a government employee of Loudi in Central China Hunan province.
Wen Hu now has lost nearly all of his 240,000 yuan savings in the stock market with only 7,000 yuan left in his account.
According to a recent survey from the official Shanghai Securities News and Stock Star, only 6% of the respondents had made money in the past year and while over 60% of the 25,110 respondents has lost nearly 70% of the money they invested in the Chinese stock market.
The survey also showed that more than half the respondents said they were “fully” invested in equities while 30 percent said they had kept on buying in the past several months in the false belief that the market had bottomed out.
Fang Yu, a retiree in her mid-50s, decided to top up when the leading indicator sank to 3,000 points with keeping hearing from analysts and economists about an impending market rebound. She found she was to naïve after the indicator dropped to below 2,000.
Wu Feng, an analyst at TX Investment Consultant said that unlike professional institutional investors, individual investors prefer concept sectors and high-risky cyclical sectors, such as energy and metals which coincidently have the largest drops this year.
Stocks of nonferrous metal, civil aviation, and insurance companies led the hefty fall this year, with nonferrous metal declining nearly 80 percent.
That’s the reason individual investors got such great losses, said Wu.
Based on the latest figures from the China Securities Depository and Clearing Co, nearly 120 million A-share accounts were opened with various stock brokerages as of Dec 19. Of these, 199,700 accounts were opened in the week from Dec 15.
Shares held by these accounts amounted to 4.5 trillion yuan, or nearly 50 percent of the total capitalization of all tradable shares, according to Wu.
The massive losses of has forced investors to focus on the shift from stock market to other sectors. About 20% of the respondents have shelved their plans of buying new apartments, cars or refurbishing their homes.
70% respondents of the survey from the Shanghai Securities said they would exit the stock market this year while 58% said they would retreat from the market.
There were 27% respondents expecting the stock would drop further in the beginning of 2009 before recovering later. Others forecasted that the stock market will rise significantly early this year.
Due to the recession of the stock market, people’s enthusiasm of investing in the stock market will be shattered in 2009, given a series of panic selling in 2008, said Wu.
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